Sales up, profits down in Williams-Sonoma Q1
June 2, 2003-- Home Textiles Today,
With stockpiles and costs both climbing higher, first-quarter profits at Williams-Sonoma Inc. fell by 12.8 percent, even though sales climbed higher at a double-digit pace, rising by 12.2 percent.
Earnings came in far better than expected, helped by stronger sales in the catalog business. Fully diluted earnings of $0.11 per share came in sharply above the company's earlier forecast of an $0.08 per-share profit.
Sales at the diversified retailer rose by 12.2 percent, to $536.8 million from $478. 4 million last year.
Inventories rose by 47.5 percent, to $372.5 million from $252.5 million during the same period a year ago, an increase of $120 million, as the retailer improved its in-stock position on core merchandise in the Williams-Sonoma, Pottery Barn and Pottery Barn Kids brands in a drive to improve customer service and sales.
Costs increased by 16.7 percent, to $182.8 million from $156.7 million. As a percentage of sales, costs climbed higher by 130 basis points, or 1.3 percentage points, to 34.1 percent from 32.8 percent a year ago.
|Qtr. 5/4 (x000)||2003||2002||% change|
|Oper. income (EBIT)||21,781||24,964||-12.8|
|Per share (diluted)||0.11||0.13||-15.4|
|Average gross margin||38.1%||38.0%||—|