Sonoma boosts profits in 3Q

In spite of the tough retail climate, Williams Sonoma Inc. delivered a positive third quarter in terms of financial results.

The retailer boosted its net profit for the quarter by nearly 65 percent compared to last year, reaching almost $3.9 million. Its operating income rose to $8 million, more than 9 percent better than the same figure for last year's third quarter.

Revenues increased by nearly 9 percent in the quarter, to $462.1 million. Within that figure, the retailer posted retail sales of $257.6 million, up more than 15 percent over last year's third quarter. The company managed that impressive growth despite posting a same-store sales decline of 1.1 percent for the quarter.

Dale Hilpert, ceo, credited a rebound in Pottery Barn's sales for the positive overall sales picture. Pottery Barn reported a same-store sales increase of 2.6 percent in October, its best monthly total of the year, according to Hilpert.

Williams-Sonoma was also successful in monitoring expenses. Its SG&A expenses as a percentage of revenues decreased by 130 basis points, to 34.2 percent. This offset a 140-basis-point decline in the company's average gross margin, which finished the quarter at 35.9 percent.

Williams-Sonoma Inc.

QTR 10/28 (X000) 2001 2000 % CHG
Net sales $462,096 $424,572 8.8
Oper. income (EBIT) 7,998 7,324 9.2
Net income 3,853 2,340 64.7
Per share (diluted) 0.07 0.04 75.0
Average gross margin 35.9% 37.3%
SG&A expenses 34.2% 35.5%
Nine months
Net sales 1,308,662 1,156,315 13.2
Oper. income (EBIT) 14,143 27,084 -47.8
Net income 5,697 12,241 -53.5
Per share (diluted) 0.10 0.21 -52.4
Average gross margin 35.1% 36.6%
SG&A expenses 34.0% 34.2%

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HTT August 2017

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