Sales up, profits down in Williams-Sonoma Q1

By Staff -- Home Textiles Today, 6/2/2003 12:00:00 AM

SAN FRANCISCO —

With stockpiles and costs both climbing higher, first-quarter profits at Williams-Sonoma Inc. fell by 12.8 percent, even though sales climbed higher at a double-digit pace, rising by 12.2 percent.

Earnings came in far better than expected, helped by stronger sales in the catalog business. Fully diluted earnings of $0.11 per share came in sharply above the company's earlier forecast of an $0.08 per-share profit.

Sales at the diversified retailer rose by 12.2 percent, to $536.8 million from $478. 4 million last year.

Inventories rose by 47.5 percent, to $372.5 million from $252.5 million during the same period a year ago, an increase of $120 million, as the retailer improved its in-stock position on core merchandise in the Williams-Sonoma, Pottery Barn and Pottery Barn Kids brands in a drive to improve customer service and sales.

Costs increased by 16.7 percent, to $182.8 million from $156.7 million. As a percentage of sales, costs climbed higher by 130 basis points, or 1.3 percentage points, to 34.1 percent from 32.8 percent a year ago.

Williams-Sonoma Inc.