Williams-Sonoma 4Q Profit Rises, Cautious About 2008
San Francisco Williams-Sonoma Inc. on Thursday posted a higher quarterly profit but gave a cautious outlook for the current fiscal year, citing a challenging economic backdrop.
"As we look forward to 2008, we believe we will be operating in one of the most challenging macro-economic environments we have seen in many years," CEO Howard Lester said in the earnings release.
The retailer said its fiscal fourth-quarter profit rose 3%, helped by an extra week in the period. It reported that net income climbed to $124.6 million from $121.1 million a year earlier.
Revenue for the period ended Feb. 3 grew 9% to $1.37 billion from $1.25 billion. Meanwhile, retail revenue gained 8% to $846.6 million.
For the year, earnings fell 6% to $195.8 million from $208.9 million in the prior year. Full-year sales increased to $3.94 billion, up 6% from $3.73 billion.
Given the increasingly challenging home-furnishings industry, Williams-Sonoma said it would focus on reducing catalog circulation, containing discretionary costs and aggressively managing inventory.
“To support future growth, in 2008 we are planning to increase retail-leased square footage by approximately 8% by adding 29 net new stores and expanding or remodeling an additional 20 stores,” Lester said in the statement. “West Elm, with 12 new stores, will contribute approximately one-third of this leased square-footage increase.”