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Thursday, December 04, 2008

Williams Sonoma Posts Third-Quarter Loss

By Kathryn Elizabeth Tuggle

FOXBusiness

Williams Sonoma (WSM), the New York-based kitchen and home goods retailer, posted a third quarter loss on Thursday of $11 million, or 10 cents per share.

This is a sharp decline from a year earlier, when the company profited $27.1 million, or 25 cents per share. Thomson Reuters analyst estimates had projected an 11 cent per-share loss.

Revenue for the company declined by 16% to $752.1 million as sales at stores that had been open for 12 months were down by 21.4%. Gross margin shrank from 38.2% to 32%

The company, which also owns Pottery Barn, posted an amended credit agreement and commercial letter of credit reimbursement facility.

The company said Thursday that it had terminated a $150 million stock buyback program to conserve cash and had amended a $300 million unsecured revolving credit line.

Williams Sonoma’s amendment to its credit agreement will include a fixed charge coverage ratio covenant that places limitations on how dividends are distributed to shareholders.

Retailers of home goods and furnishings nationwide like Bed Bath and Beyond and Linens ‘n Things have recently encountered slacking sales, forcing some into bankruptcy.

Moving into the fourth quarter, Thomson Reuters analysts expect a 19 cent per-share profit and, down from $1.15 in 2007.

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