William-Sonoma income plummets 41.2% in second quarter

Same-store sales down an average of 11.7% across all formats

Staff Staff -- Furniture Today, August 29, 2008

SAN FRANCISCO - Williams-Sonoma, parent company of Pottery Barn and several other retail formats, said net income fell 41.2% in its second fiscal quarter amid a double-digit decline in same-store sales.

Total sales for the quarter ended Aug. 3 fell 4.6% to $819.6 million, but same-store sales dropped 11.7%.

"We were disappointed by the degree to which the macro-economic environment deteriorated in the second quarter - the impact of which was progressively declining comparable store sales throughout the quarter," said Howard Lester, chairman and CEO.

"Despite this trend, we remained focused on the aspects of our business we could control, successfully executed against our strategic operational initiatives, and delivered diluted earnings per share in line with expectations," Lester added.

Net income for the quarter totaled $18.4 million, or 17 cents per share, a figure that included a one time gain of 9 cents per share from the sale of its corporate airplane. In last year's second quarter, net income was $26 million, or 23 cents per share.

The company said same-store sales fell 16% at Pottery Barn, 13.5% at Pottery Barn Kids and 4.5% at Williams-Sonoma locations.

For the six months ended Aug. 3, sales were $1.6 billion, a decline of 4.4% from the same period last year. Six-month net income was $28.8 million, or 27 cents per share. That's a drop of 34.6% from the same period last year.

Six-month same-store sales fell 10.4% company-wide, including a 13.3% decline at Pottery Barn and a 12.3% drop at Pottery Barn Kids.

The company ended the second quarter with 613 stores, including 260 Williams-Sonoma, 200 Pottery Barn, 95 Pottery Barn Kids, 32 West Elm and 9 Williams-Sonoma Home.