High-end home products retailer Williams-Sonoma (WSM)announced a lower-than-expected drop in fourth-quarter profit on Tuesday and said it expects losses for the first three quarters of fiscal 2009.
For the three months ended Feb. 1, the San Francisco-based company said it earned $12.2 million, or 12 cents a share, compared with $124.6 million, or $1.15 a share, in the same quarter a year ago. Revenue came in at $1.01 billion -- a 27% decline from $1.37 billion the year prior.
Excluding one-time charges tied to store closures and severance, the company earned 31 cents a share. Analysts polled by Thomson Reuters were expecting a profit of 16 cents a share on revenue of $976 million, excluding one-time charges.
The specialty retailer, which operates Pottery Barn and West Elm along with its namesake stores, said its cost-cutting measures and increased promotional activity helped it cope with the gloomy retail environment.
“We believe the successful execution of all of these initiatives once again demonstrates the operational flexibility and marketing strength of our multi-channel business model -- particularly in these difficult economic times,” said Howard Lester, Williams-Sonoma chairman and chief executive, in a statement.
All of the company’s brands saw declines in net revenue during the quarter, with Pottery Barn, Williams-Sonoma and Pottery Barn Kids leading the way, the company said.
The company said it expects a loss of 20 cents to 23 cents a share during the fiscal first quarter, a loss of eight cents to 14 cents a share for the second quarter, and a loss of two cents to eight cents a share for the third quarter. Banking on a stronger holiday season, the company said it expects to swing to a profit of 27 cents to 36 cents a share during the fourth quarter.
"We are not intending to signal any type of insight into which direction the economy is headed -- but only that if our trends continue as they are today; this is how we would expect the year to unfold," Lester said.
For the full year, the company said its earnings could range from a loss of 15 cents a share to a profit of five cents. Analysts polled by Thomson Reuters are expecting a full-year profit of six cents a share.
Williams-Sonoma also said it plans to maintain its quarterly cash dividend of 12 cents a share through fiscal 2009, so long as “there are no significant changes” to the company’s business plan, and operating results fall within the ranges forecasted, said Lester.
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