Williams-Sonoma's 1Q comes in strong

Associated Press

SAN FRANCISCO (AP) -- Williams-Sonoma Inc. blew past market expectations for its fiscal first quarter as shoppers stepped up spending on housewares and furnishings both online and in stores.

The San Francisco company, which owns Pottery Barn, Williams-Sonoma and West Elm, has benefited from the housing recovery that has gradually taken root in many parts of the country.

Williams-Sonoma said after the stock market closed Thursday that it earned $39.5 million, or 40 cents per share, for the quarter that ended May 5. That's compared with $30.7 million, or 30 cents per share, earned in its fiscal first quarter last year. On an adjusted basis, it earned 41 cents per share versus 34 cents per share.

Revenue for the quarter increased to $887.8 million from $817.6 million.

Analysts polled by FactSet were anticipating that the company would earn an adjusted 37 cents per share on revenue of $867.9 million.

The company said that its revenue from stores open at least a year, considered a key indicator of financial performance, increased 7.2 percent. That included 16.1 percent increase at PBTeen, 11.8 percent increase at West Elm, 7.6 percent increase at Pottery Barn, 6.9 percent increase at Pottery Barn Kids and 1.9 percent increase at Williams-Sonoma.

Williams-Sonoma launched its first company-owned stores and online business in Australia during the quarter and said that it plans to expand into the United Kingdom later this year.

CEO and President Laura Alber said it was the company's best first quarter in its history. As a result, the company raised its full-year forecasts.

Williams-Sonoma now expects to earn between $2.67 and $2.77 a share on an adjusted basis, up from a prior range of $2.65 to $2.75 a share, on revenue between $4.22 billion to $4.30 billion, up from $4.20 billion to $4.28 billion. Analysts were anticipating earnings of $2.77 per share for the year on revenue of $4.25 billion.

Investors apparently were unimpressed with the modest full-year forecast, despite the strong quarter, and Williams-Sonoma's shares slipped 50 cents in after-hours trading to $56.20 in extended trading following the earnings report. The company's stock added $1.67 to close regular trading at $56.70.

Williams-Sonoma stock is up roughly 60 percent since this time last year.