Williams-Sonoma Shares Fall Most in 5 Years on Lower Forecast

(Bloomberg) -- Williams-Sonoma Inc., the U.S. gourmet-cookware retailer, fell the most in five years in New York trading after reducing its fourth-quarter profit forecast on an unexpected decline in holiday sales.

Fourth-quarter earnings per share, excluding some items, will probably be $1.12 to $1.15, compared with an earlier forecast of no less than $1.20, the San Francisco-based retailer said today in a statement. Sales at Williams-Sonoma's stores open more than a year fell 0.4 percent for the nine weeks through Dec. 30, the company said.

Customer visits to home-furnishings stores slowed more than Williams-Sonoma expected, and 2008 may be ``increasingly challenging,'' Chief Executive Officer Howard Lester said in the statement. The retailer cut prices and offered cheaper shipping at its Pottery Barn home-furnishings unit during the holidays to lure shoppers discouraged by falling house prices.

``Home furnishings retailers in general were highly promotional this holiday period,'' Laura Champine, a New York- based analyst with Morgan Keegan Inc. said in an interview Jan. 11.

Williams-Sonoma declined $2.30, or 10 percent, to $19.90 at 9:53 a.m. in New York Stock Exchange trading. It was the biggest decline since July 2002.

Three analysts surveyed by Bloomberg estimated an average gain of about 0.8 percent in comparable-store sales during the November-December period. For the fourth quarter, 21 analysts expected profit of $1.20 a share, on average.

 

Read more at Bloomberg