Williams-Sonoma holiday same-store sales tumble

Kitchen gadget and home furnishings chain Williams-Sonoma Inc. said Thursday its same-store sales dropped 24.2 percent over the holidays, and warned its fourth-quarter profit will likely come in at the low end of expectations.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

In the eight weeks ended Dec. 28, the operator of the Williams-Sonoma and Pottery Barn brands said its total revenue sank 23 percent to $729.4 million, as retail revenue and catalog sales both declined sharply.

During the holiday period, Williams-Sonoma said retail revenue fell 22 percent to $606.7 million from $471.7 million. Direct-to-customer revenue slid 23 percent to $257.7 million from $335.3 million.

The company said fourth-quarter earnings will be closer to 10 cents per share than 30 cents per share, as its profit margins decreased due to its efforts to clear out inventory. Williams-Sonoma expects revenue to range between $940 million and $1 billion for the period.

On average, analysts surveyed by Thomson Reuters expect a profit of 17 cents per share for the quarter ending Jan. 30, on $964.8 million in revenue.

For the fiscal year, Williams-Sonoma forecasts profit of 27 cents to 47 cents per share, or 13 cents to 33 cents per share excluding one-time gains and losses. Revenue is expected to between $3.29 billion to $3.35 billion