Williams-Sonoma Drops On Weak Guidance

Shares of Williams-Sonoma, Inc. WSM fell around 5 percent in after-hours trading after the company issued a weak forecast. However, the company reported in-line earnings for the second quarter. The San Francisco, California-based company posted quarterly net income of $53.7 million, or $0.58 per share, compared to $0.53 per share, in the year-ago quarter. Its revenue rose 8.5 percent year-over-year to $1.13 billion. However, analysts were expecting earnings of $0.58 per share on revenue of $1.11 billion. The average estimate among 15 Estimize users was for earnings of $0.59 per share and revenue of $1.11 billion. Its comparable brand revenue climbed 6.3 percent in the quarter. E-commerce net revenue rose 9.1 percent to $570 million from $523 million, while retail net revenue climbed 7.9 percent to $557 million from $517 million. Its operating margin shrank to 7.4 percent in the latest quarter, from 8.2 percent in the year-ago quarter. During the second quarter, the company repurchased 899,301 shares of common stock for a total cost of around $72 million. At the end of the quarter, merchandise inventories rose 15.3 percent to $1.031 billion, compared to $895 million at the end of year-ago quarter. Laura Alber, President and Chief Executive Officer, said, "We are pleased to have delivered another quarter of solid performance, once again demonstrating the competitive advantage from our multi-brand, multi-channel, business model. As anticipated, during the quarter, we incurred incremental supply chain costs primarily associated with the west coast port disruption to restore our in-stock inventory levels, allowing us to provide superior long-term customer service. We are focused on disciplined execution against our strategic growth initiatives." For the current quarter, Williams-Sonoma projects earnings of $0.68 to $0.73 per share, on revenue of $1.19 billion to $1.22 billion. Analysts expected earnings of $0.75 per share on revenue of $1.22 billion. The company projects full-year earnings of $3.35 to $3.45 per share, and revenue of $4.95 billion to $5.02 billion. Analysts expected earnings of $3.48 per share on revenue of $5.01 billion. Williams-Sonoma shares fell 4.93 percent to $79.02 in the after-hours trading session.