Williams-Sonoma Cautious on 2Q
June 4, 2007-- Home Textiles Today,
Citing a sluggish home furnishings environment, Williams-Sonoma lowered its second-quarter outlook — but affirmed its full-year expectations.
The retailer now anticipates 2Q earnings of 14-18 cents per share, vs. a earlier forecast of 16-20 cents, pointing to rising raw material prices, markdowns in home furnishings, and high inventory levels across the industry, executives told analysts.
Consolidated results were modest in the first quarter. Sales rose 2.7% to $816.1 million. Excluding the Hold Everything chain (closed down last year), sales rose 5.2%.
On the bricks-and-mortar side, comps were off 0.8%. The only standout: the outlet segment saw comps up 9.3%
Diluted earnings per share were off 20% to 16 cents.
During the call, executives said several strategic changes are underway, particularly for Pottery Barn. PBKids will extend into apparel — including 1,000-square-foot stand-alone stores —and expand giftware. Pottery Barn Bed + Bath is expanding its merchandise assortment. Pottery Barn Outdoor catalog is broadening its circulation.