Williams-Sonoma profits up sharply, raises outlook
Ray Allegrezza -- Furniture Today, November 18, 2010
San Francisco - The home textiles category was among the best-performers at a number of Williams-Sonoma Inc. nameplates during the third quarter.
During the company's quarterly conference call today, executives called out textiles as among the best-selling categories at Pottery Barn, PBTeen, Pottery Barn Kids and West Elm.
The company beat expectations during the quarter ended Oct. 31, with net income of $36.5 million, or 34 cents per share, nearly five times larger than last year's 3Q $7.3 million, or 7 cents per share.
Total sales rose 12% to $816 million, and total comps increased 8.1%. Division highlights include:
• Pottery Barn sales rose 14%, with comps up 11.6%;
• Pottery Barn Kids sales rose 8%, with comps up 10.3%;
• PBTeen sales rose 17%, with no comp break-out given.
West Elm's third quarter was described as "very strong."
At the upscale Williams-Sonoma Home division, sales were not broken out, but the company said the net loss decreased from 3 cents per share in the year-ago quarter to break even in the recent period. The last of the nameplate's free-standing stores are scheduled to close by the end of the year, with the brand's presence shifted to ecommerce and a limited in-store footprint within Williams-Sonoma stores.
Overall, the company is seeing some room for optimism.
"Our best customers are spending more and our reactivated customers are responding better than we have in the past," said Pat Connolly, executive vp and chief marketing officer.
He added: "That gives us a lot of expectation for the new customer growth that we're getting going into next year, especially for brands like West Elm where the broadened assortment has improved the yield from new customer acquisition."
Williams-Sonoma Inc. also raised its fourth quarter and full-year guidance. It expects EPS of 88 to 93 cents for the quarter and $1.75 to $1.80 for the year.
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