Williams-Sonoma: better-than-expected results
The company reported net earnings of $399,000, compared with earnings of $18.4 million in the same quarter last year. Comp-store sales declined 15.3%, as net revenues declined 18% to $672.1 million from $819.6 million.
The company had braced for the worst, according to Howard Lester, chairman and CEO. “Substantially better-than-expected earnings in the second quarter were primarily driven by stronger than anticipated merchandise margins and ongoing cost containment initiatives,” he said.
The company recently added to its list of stores to close by the end of the year, from nine to 16. It will expand, however, in the Middle East, where it will open its first four stores through its franchisee, M.H. Alshaya Co. in the first half of 2010.
Home prices show uptick
“For the second month in a row, we’re seeing some positive signs,” says David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. He added that the U.S. National Composite rose in the second quarter compared with the first quarter for the first time in three years.
The 10-city and 20-city home price composites showed their second straight month-over-month increases, with Dallas and Denver posting four consecutive months of growth.
Still, all markets measured are down from a year ago, with 15 of the 20 markets showing double-digit annual declines in home prices.
Consumer confidence bounces back
The Consumer Confidence Index increased in August after two consecutive months of declines, according to the Conference Board industry group. The Index stands at 54.1 (1985=100), up from 47.4 in July.
“Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend,” said Lynn Franco, director of the Conference Board Consumer Research Center.
The Present Situation Index increased slightly to 24.9 from 23.3 last month. The Expectations Index improved to 73.5 from 63.4 in July.
Franco added: “As long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for the Conference Board by TNS.