Williams-Sonoma earnings fall 42 percent
San Francisco-based Williams-Sonoma, parent of Pottery Barn and Williams-Sonoma Home, saw first-quarter net earnings fall 42 percent to $10.4 million from $18.2 million in the same period last year. Still, the lower earnings beat Wall Street estimates, thanks to “controlled costs” and improved distribution to stores, as well as a reduction in catalog mailings, the company said.
Sales dropped 4.2 percent to $781.8 million.
Howard Lester, chairman and CEO, said the company will reduce its revenue guidance for the year because of a “continuing deterioration in the macroeconomic environment and industry-wide sales declines in the home furnishings category overall.”
Comparable-store sales fell 4.8 percent at Williams-Sonoma kitchen product stores and a full 10.5 percent at Pottery Barn stores. Comparable-store sales took the biggest hit at the company’s outlet stores, falling 13 percent, while Pottery Barn Kids stores saw a 10.9 percent decline.
The company opened two new West Elm stores and closed none in the quarter. Four Williams-Sonoma stores were opened, while four others were closed; and two Potter Barn stores opened their doors in the United States, while two were closed.
In all the, company currently operates 603 stores, seven mail order catalogs and six e-commerce Web sites.
Sherwin-Williams lowers guidance for the year
Sherwin-Williams expects lower net sales in the 2008 fiscal year, a reversal of a formerly anticipated sales gain in the low single digits.
The “significantly lower expectation” of per-share income is due to the “expected continuation of the unprecedented downturn in the U.S. housing market and rapidly rising raw material cost increases.”
Sherwin-Williams is doubly hurt by rising petroleum costs, because it uses petroleum both for shipping needs and raw materials for paint products.
For the same reasons, the company also lowered its second-quarter earnings-per-share guidance. Sherwin-Williams plans a conference call to discuss the issues later today.
In other company news, the Cleveland-based retailer and manufacturer announced a $50,000 grant to the Cleveland Housing Network (CHN).
The city of Cleveland, which has struggled with poverty- and housing-related issues even before the downturn in the housing market, utilizes the CHN to offer lease-purchase agreements to low-income residents. Last week, Sherwin-Williams CEO Chris Connor and 30 company associates helped paint and rehab a home as part of the CHN lease purchase program.
Lowe’s promotes ‘staycation’ trend
Through its “Creative Ideas” Web site, and other online tools, Lowe’s has opted to promote the “staycation” trend of individuals foregoing vacations in favor of spending time at home, primarily because of high gas prices.
At www.lowescreativeideas.com/outdoorliving, the retailer promotes hammocks, lounge chairs, flowers, tiki torches and other “tropical” items meant to help create a “tropical paradise” in the backyard. The site also gives tips on how to create an “urban garden.”
The company is using the site to promote items such as fire pits, trellises, lounge chairs and hammocks under the “Garden Treasures” line; as well as Weber charcoal grills and Malibu solar tiki torches.
At www.lowes.com/learn2grow, the retailer also offers tips for creating a European-style garden, with flower tips and product suggestions on fountains, trellises and gazebos.