Williams-Sonoma Posts In-Line Q4 Earnings, But Issues Downbeat Outlook

Shares of

dropped more than 3 percent in after-hours trading, despite the company reporting in-line earnings for the fourth quarter. The company's weak forecast exerted pressure on the shares. The San Francisco, California-based company posted a quarterly profit of $147 million, or $1.57 per share, versus a year-ago profit of $133.8 million, or $1.38 per share. Excluding one-time items, the company earned $1.52 per share in the recent quarter. Its net revenue climbed 5.2 percent to $1.542 billion from $1.466 billion. However, analysts were expecting earnings of $1.52 per share on revenue of $1.57 billion. Its comparable brand revenue rose 5.1 percent in the quarter. E-commerce net revenue climbed 9.0 percent to $770 million versus $706 million, while retail net revenue in the fourth quarter gained 1.6 percent y/y to $772 million from $760 million. Williams-Sonoma's operating margin widened to 15.4 percent from 14.8 percent. Williams-Sonoma lifted its quarterly dividend from $0.33 per share to $0.35 per share. Laura Alber, President and Chief Executive Officer, said, "Our powerful brands and the competitive advantage provided by our multi-channel platform and entrepreneurial culture delivered another year of strong returns for our shareholders. In 2014, we experienced growth in all of our brands and across our channels. Our highly profitable e-commerce business represented more than 50% of our revenues in 2014, a significant milestone for Williams-Sonoma, Inc., as we capitalize on our position at the intersection of retail and technology." The company expects Q1 earnings of $0.40 to $0.45 per share on revenue of $990 million to $1.01 billion. It projects FY 2015 earnings of $3.35 to $3.45 per share on revenue of $4.95 billion to $5.02 billion. Analysts had expected earnings of $0.55 per share for the first quarter and $3.65 per share for the year. Williams-Sonoma shares fell 3.85 percent to $77.84 in after-hours trading.