Williams-Sonoma profit off 27% in July quarter
By Furniture Today Staff -- Furniture Today, September 2, 2007
San Francisco — Retailer Williams-Sonoma, the parent company of Pottery Barn and several other retail formats, said its second-quarter net earnings were down 27% from a year earlier as margins were squeezed by merchandise markdowns and higher costs.
Revenues, on the other hand, rose 4.1%, due largely to improvements at its West Elm, Williams-Sonoma Home and Pottery Barn stores.
"While the home furnishings macro-environment continued to be challenging, the strength of our brands and strong execution once again allowed us to deliver better-than-expected earnings," said Howard Lester, chairman and CEO.
Lester said he was especially encouraged by improving trends at Pottery Barn and the success of revitalization efforts there.
Revenues for the 13 weeks ended July 29 were $859.4 million, while net income was $26 million.
The company said same-store sales for the quarter rose 1.8% at Pottery Barn stores and 1.1% at Williams-Sonoma stores, but fell 3.8% at Pottery Barn Kids locations.
The retailer ended the quarter with 190 Pottery Barn stores, a decrease of seven from the end of the last fiscal year. There were also 91 Pottery Barn Kids stores, compared with 92 at the end of last year.
For the six months ended July 29, revenues rose 3.4% to $1.68 billion and net income fell 24.8% to $44.1 million.
| Williams-Sonoma | |||
|---|---|---|---|
| Owns California Closet, Chambers, Gardener's Eden, Hold Everything and Pottery Barn | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 7/29 | 2007 | 2006 | Change |
| (a) Based on average shares outstanding of 112 million in the 2007 quarter, 112.3 million in the 2007 six months, 117.7 million in the 2006 quarter and 117.5 million in the 2006 six months. |
|||
| Revenues | $859,396,000 | $825,536,000 | 4.1% |
| Operating income | 42,868,000 | 54,248,000 | (21.0%) |
| Net income | 25,966,000 | 35,563,000 | (27.0%) |
| Earnings per share (a) | 0.23 | 0.30 | (23.3%) |
| 6 months ended 7/29 | 2007 | 2006 | Change |
| Revenues | $1,675,447,000 | $1,619,822,000 | 3.4% |
| Operating income | 71,310,000 | 88,938,000 | (19.8%) |
| Net income | 44,116,000 | 58,662,000 | (24.8%) |
| Earnings per share (a) | 0.39 | 0.50 | (22.0%) |
