SAN FRANCISCO–Operating in what executives called a “bleak” retail environment, Williams-Sonoma posted a fourth-quarter net gain but predicted that 2008 earnings would come in below analysts’ estimates due to a tough climate for home goods.
Net revenues for the fourth quarter ended Feb. 3 rose 9.5 percent to $1.38 billion from the year-ago quarter.
Net earnings rose to $124.6 million from $121.1 million in the year ago period.
Breaking down its retail concepts, the Williams-Sonoma housewares brand generated “one of the best operating margins in the company’s history,” due in part to e-commerce growth and a redesigned Web site, as well as the strength of cookware, tabletop and electrics, said Dave DeMattei, group president of Williams-Sonoma, Williams-Sonoma Home and West Elm. By contrast, bakeware was soft.
This year, the brand will expand its luxury assortments.
Williams-Sonoma Home, the upscale furniture concept, will focus on building brand awareness and improving profitability.
The retailer was “extremely pleased” with West Elm, its chain of modern, affordable home goods and its most aggressive growth vehicle, DeMattei said. Twelve new West Elm stores will open this year versus five in 2007.
Pottery Barn’s comparable-store sales fell in the quarter, but Laura Alber, president, said the brand is entering a next phase and is showing improvements.
After jazzing up Pottery Barn’s mix with brighter colors and bolder patterns recently, the retailer will focus on enhancing visual merchandising and “reinstating value,” Alber said.
