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Williams-Sonoma reduces 4Q earnings estimate

Furniture Today Staff -- Furniture Today, January 16, 2012

SAN FRANCISCO - Williams- Sonoma has cut its earnings estimate for the fourth quarter, saying that discounting during the holidays will eat into its profit margins.
     The company, parent of Top 100 furniture store chain Pottery Barn, also said it is boosting the quarterly cash dividend on its stock by 29% and is authorizing a new $225 million stock repurchase program.
     Williams-Sonoma said its sales of $901 million in the eight-week holiday period ended Dec. 25 were up 4.2% from the comparable period a year earlier, with comparable brand revenue increasing by 4.9%.
     The holiday sales growth came in the company's direct to- customer (online and catalog) segment, which was up 11.6% to $376 million, while in-store retail revenues slipped 0.6% to $525 million.
     Because of the "promotional environment" during the holidays, the company said it now expects to report fourth-quarter earnings per share of $1.10 to $1.15, rather than the $1.15 to $1.20 it forecast earlier. In the 2010 fourth quarter, the company had earnings per share of $1.05.
     The company said its board authorized a 5-cent increase in the dividend on Williams- Sonoma stock, to 22 cents per share. The new dividend is payable Feb. 24 to shareholders of record on Jan. 27.

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