Williams-Sonoma Results Reflect Economy

SAN FRANCISCO-Williams-Sonoma Inc. cited tough economic conditions Wednesday in reporting lower earnings and sliding comparable store sales, saying that the “macroeconomic” environment was working against it as well as others in the home furnishings segment of retailing. Howard Lester, chairman and CEO, commented that the “macro-environment in the home furnishings sector in the first quarter of 2007 continued to be very challenging,” although Lester said that Williams-Sonoma managed to do better than expected in light of prevailing economic conditions.

Lester and other Williams-Sonoma executives, commenting during a conference call with financial analysts, said the company was “particularly pleased with the performance of our emerging brands, which include PBteen, Hold Everything, West Elm, and Williams-Sonoma Home. He also praised the company’s efforts to implement strategies, such as improving its supply chain and technology operations. Although the retail environment for home furnishings and related products “continued to be difficult,” the company remained focused on its most important initiative, the revitalization of the Pottery Barn brand, Lester said.

The company reported an increase in its retail net revenues in the first quarter, saying that the increase resulted mainly from a 6.3% year-over-year rise in retail leased square footage, including 15 net new stores. The company’s plans for expansion call for retail leased square footage to increase in the range of 5% to 6%, versus Williams-Sonoma’s previous guidance in the range of 4% to 5%.