NEW YORK, March 14 (MarketingClick/Reuters) – Home goods retailer Williams-Sonoma Inc. said on Wednesday its earnings for the fourth quarter fell 9 percent as it worked through a difficult holiday season and resorted to markdowns to clear its shelves in time for spring.
The San Francisco-based retailer, which operates Williams-Sonoma, Pottery Barn and Hold Everything stores and catalogs, said its net income for the quarter, ended Jan. 28, was $44.5 million, or 79 cents a share, down from $48.7 million, or 82 cents a share, in the year-ago quarter.
But the results beat Wall Street expectations. Wall Street analysts polled by First Call/Thomson Financial had on average expected a profit of 78 cents a share. In late February the company said its earnings could top expectations after it worked hard to curb expenses and reduce its markdowns and inventory.
“As expected, fourth quarter was a difficult holiday season for retailers,” said Howard Lester, chairman and chief executive. “Despite challenging economic times, we feel strongly that we responded well by aggressively managing expenses and reducing inventories.”
Williams-Sonoma said net revenue for the quarter rose 19 percent from a year earlier, to $673.2 million, while sales at stores open at least one year — “same-store sales” — rose 3.5 percent.
Gross margin as a percentage of net revenue was 40.2 percent, about a 240 basis point fall from the year-ago quarter, as “highly aggressive promotional activity and inventory write-offs more than offset the favorable impact of the company’s sourcing initiatives,” Williams-Sonoma said.
The company said it expects first-quarter revenues of $415 to $428 million and same-store sales growth of less than 1 percent. It sees diluted per share results between nil and a loss of 3 cents. Analysts expect a loss of 2 cents a share, according to First Call.
For the second quarter, Williams-Sonoma said it expects revenues of $420 million to $433 million and results per share in a range of a loss of 1 cent to a profit of 1 cent. Analysts expect the company to report breakeven results, according to First Call.
Full-year earnings are expected to be $1.17 to $1.23 per share on revenues of $2.12 billion to $2.18 billion, the company said. Analysts’ consensus earnings estimate is $1.19 per share, according to First Call.
Shares of Williams-Sonoma fell 88 cents $26.32 in New York Stock Exchange trading on Tuesday. The stock has a 52-week range of $15.50 to $45.19.
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