Erosion in demand for high-end furniture helped drive declines in sales and income at Williams-Sonoma but adjusted earnings per share managed to beat a Wall Street estimate.
Net earnings were $156.5 million, or $2.35 per diluted share, versus $254.1 million, or $3.50 per diluted share, in the year-previous quarter.
Adjusted for one-time events, Williams-Sonoma diluted earnings per share were $2.64 per share while the year-before figure remained at $3.50 as the company made no adjustments, the company noted.
An analyst consensus estimate published by Yahoo Finance called for adjusted diluted earnings per share of $2.37 and sales of $1.79 billion.
Comparable sales slipped 0.4% at Pottery Barn, 15.8% at West Elm, 4.4% at Williams Sonoma, 3.3% at Pottery Barn Kids and Teen, and 6% for the company overall.
Net revenues were $1.76 billion versus $1.89 billion in the year-earlier quarter. Operating income was $199.5 million versus $323.5 million in the year-prior period, while adjusted operating income was $225.7 million versus the $323.5 million in the quarter a year past.
Laura Alber, Williams-Sonoma president and CEO, said in a conference call that despite the tough macroeconomic environment, the company continued with operational, collaborative and brand initiatives.
She pointed out that two-year and four-year company comps were positive despite the decline in year-over-year comparable sales. Alber added that the high-ticket furniture offering saw particular softness in demand, which especially hurt furnishings-heavy West Elm, yet high-ticket electronics and cookware continued to perform well. Outdoor products experienced delayed spending in spring, but textiles sold well, she said, as consumers traded down from major home decorating projects to easy and relatively inexpensive domestic refreshing.
In announcing the financial results, Alber said, “Despite a challenging macro backdrop, we delivered another solid quarter of earnings. With our focus on compelling product, customer service, and profitability, we achieved our financial expectations. We have a culture of innovation and an experienced team who knows how to increase operational efficiencies, control costs, deliver world-class customer service, and drive new growth opportunities.”