Williams-Sonoma Shares Rise On Upbeat Q1 Earnings

Shares of

gained more than 3% in after-hours trading after the company reported upbeat earnings for the first quarter. However, the company issued weak forecast for the second quarter. The San Francisco, California-based company posted a quarterly profit of $44.8 million, or $0.48 per share, compared to $46.2 million, or $0.48 per share, in the year-ago period. Its revenue climbed 5.8 percent to $1.03 billion. However, analysts were expecting a profit of $0.45 per share on revenue of $1.01 billion. The average estimate among 14 Estimize users was for earnings of $0.46 per share and revenue of $1.01 billion. Its comparable brand revenue climbed 4.6 percent in the quarter. Its retail net revenue gained 3.1 percent to $498 million, while e-commerce revenue rose 8.4 percent to $533 million. Williams-Sonoma's gross margin shrank to 36.8 percent from 37.8 percent, while operating margin declined to 7.0 percent from 7.6 percent. During the quarter, the company repurchased 664,402 shares of common stock for a total cost of around $53 million. At the end of the first quarter, merchandise inventories rose 10.9 percent to $943 million, versus $850 million at the end of year-ago quarter. Laura Alber, President and Chief Executive Officer, said, "Our first quarter results were better than we expected, driven by West Elm and our new businesses, as well as strong operational and financial execution across all of our brands. Based on the results we see across our portfolio, we are confident in the fundamentals of our business and the year ahead. We believe that our growth strategies, consistent execution and operational discipline, put us on track to deliver another record year for our shareholders." For the current quarter, Williams-Sonoma expects earnings of $0.53 to $0.57 per share, on revenue of $1.09 billion to $1.11 billion. Analysts had projected earnings of $0.59 per share on revenue of $1.11 billion. Williams-Sonoma expects FY15 earnings of $3.35 to $3.45 per share on revenue of $4.95 billion to $5.02 billion. Williams-Sonoma shares climbed 3.27 percent to $80.44 in the after-hours trading session.