Williams-Sonoma profit rises 22 percent in first quarter - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

Williams-Sonoma profit rises 22 percent in first quarter

Updated:
SAN FRANCISCO (AP) _ Home products retailer Williams-Sonoma Inc. said Tuesday that its first-quarter profit rose 22 percent to top Wall Street expectations, helped by an upswing in business at its Pottery Barn chains.

But the company, citing economic uncertainty, offered a conservative outlook for the rest of the year although it backed its 2005 forecast.

Williams-Sonoma shares rose 15 cents to close at $37.87 in Tuesday trading on the New York Stock Exchange.

Earnings for the quarter ended May 1 grew to $26.2 million, or 22 cents per share, from $21.4 million, or 18 cents, a year ago. That beat the average estimate of 19 cents per share from analysts surveyed by Thomson Financial.

Williams-Sonoma said a move to boost in-stock items and speed up fulfillment of back orders expanded its inventory by 23 percent and added about 1 cent to earnings per share in the latest period, which it had not expected until the second quarter.

``During the first quarter, we substantially improved our customer service by fulfilling customer backorders more quickly than we had expected and improving our recent trends in order-fulfillment rates,'' Chief Executive Ed Mueller said in a statement.

Quarterly net revenue totaled $720.7 million, up 12 percent from $640.9 million a year earlier and above the mean analyst target of $719 million.

At Williams-Sonoma's retail chains, revenue climbed 13 percent to $397.2 million. Greater business at Pottery Barn and Pottery Barn Kids, where same-store sales at locations open at least a year grew a respective 6.1 percent and 10 percent, offset a 0.5 percent decline at its flagship Williams-Sonoma stores.

Elsewhere, same-store sales at Hold Everything locations plunged 16.8 percent, while outlet stores saw a sales gain of 19.5 percent.

Combined catalog and Internet business increased 12 percent to $323.5 million last quarter, with Web site orders surging 36 percent to $153.5 million, the company added.

Despite improved results last quarter, Williams-Sonoma trimmed its estimates for second-quarter sales by $8 million to range of $774 million to $790 million and cut 1 percent from same-store sales growth targets for a view of 1.5 percent to 3.5 percent. Profit is projected at 24 cents to 26 cents per share, down from a prior range of 25 cents to 27 cents per share.

The company, however, reiterated its forecast for annual earnings of $1.84 to $1.88 per share, with sales ranging from $3.51 billion to $3.57 billion.

Analysts currently see quarterly income of 26 cents per share on $789.8 million in sales, and yearly income of $1.86 per share on sales of $3.56 billion.

In last year's second quarter, Williams-Sonoma earned 23 cents per share on $689.6 million in sales. The company had a profit of $1.60 per share on sales of $3.14 billion in 2004.
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