Williams-Sonoma's shares fall on weak profit outlook

MarketsAssociated Press

Shares of Williams-Sonoma Inc. tumbled late Wednesday, after the seller of cookware and home furnishings issued a weak profit outlook.

The guidance came as Williams-Sonoma reported a 5 percent increase in fiscal second-quarter profits.

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The company said it earned net income of $50.7 million, or 53 cents per share, for the quarter. That compares with $48.9 million, or 49 cents per share, in the year-ago period.

The average estimate of analysts surveyed by Zacks Investment Research was also for earnings of 53 cents per share.

The company posted revenue of $1.04 billion in the period, also meeting Street forecasts.

Williams-Sonoma, the parent of chains including Pottery Barn and West Elm, said revenue in stores open at least a year — a key measure of a retailer's health — rose 5.7 percent during the quarter.

For the current quarter ending in October, Williams-Sonoma expects its per-share earnings to range from 58 cents to 63 cents. Analysts had expected 65 cents per share, according to FactSet.

The company said it expects revenue in the range of $1.1 billion to $1.13 billion for the fiscal third quarter. Analysts had expected $1.13 billion, according to FactSet.

Williams-Sonoma also released its full-year outlook. It expects annual earnings to be in the range of $3.07 to $3.17, with revenue ranging from $4.64 billion to $4.72 billion. Analysts had expected $3.21 per share on revenue of $4.72 billion, according to FactSet.

Shares fell nearly 11 percent, or $8.19, to $66.70 in after-hours trading, after being up 4 cents to $74.89 in regular trading on Wednesday.

Williams-Sonoma shares have increased 29 percent since the beginning of the year.