Williams-Sonoma Sales Decline

June 3, 2008  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on June 2008 Williams-Sonoma Home and West Elm were among the only bright spots in Williams-Sonoma’s first quarter. The San Francisco parent of Pottery Barn said net revenues decreased 4.2 percent to $781.8 million in the quarter that ended May 4, and earnings declined to $10.4 percent from $18.6 million a year earlier.

In a news release, Chairman and CEO Howard Lester said West Elm and Williams-Sonoma Home were the only brands generating year-over-year growth in net revenues. Across all brands, same-store sales declined 9 percent, including a 10.5 percent decrease at Pottery Barn. Direct-to-customer sales, including catalogs and the Internet, also declined 4.0 percent to $348.2 million. Only the Internet and catalog sales of West Elm and PBTeen saw an increase during the quarter.

Lester said, “Although the macro-environment in the first quarter of 2008 continued to be very challenging, we aggressively managed the aspects of the business we could control and delivered better-than-expected earnings for the quarter. As we look forward to the balance of the year, we are doing so with a more cautious outlook based on a continuing deterioration in the macroeconomic environment and industry-wide sales declines in the home furnishings category overall.”

With the declines, Williams-Sonoma cut its guidance for the second quarter. The company now expects net revenues to decline 3.7 percent to 1.6 percent. For the fiscal 2008 year, revenues are expected to decrease 5.2 percent to 3.6 percent to a range of between $3.738 billion to $3.804 billion. The company operates 603 stores.

Lester said the company has ongoing cost reduction efforts, including the sale of a corporate plane, which it announced late last month.