Williams-Sonoma CEO "Cautious" About Third, Fourth Quarters

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Williams-Sonoma Inc. reported Aug. 24 that net revenues for the second quarter ended July 30 increased 6.4 percent to $825.5 million. Same-store sales increased 1.2 percent.

The consumer response to the new Pottery Barn fall catalog is trending well below expectations five weeks after its in-home delivery, the San Francisco-based merchant's chairman/CEO Howard Lester said in a statement.

This softening in consumer demand late in the quarter is similar to what other retailers have been experiencing and is reflective of a "greater macro-economic issue also affecting this business," Mr. Lester said.

As a result, Williams-Sonoma is approaching "the third and fourth quarters with an extremely cautious outlook."

The company's net earnings during the second quarter increased 15.4 percent to $35.6 million or $0.30 per diluted share.

Direct-to-consumer net revenues in the second quarter increased 5.9 percent to $362.2 million. Internet revenues increased 23.7 percent to $213.8 million.

Net revenues for the 26 weeks ended July 30 increased 8.2 percent to $1.620 billion. Comparable-store sales increased 1.3 percent during the same period.

For the 26 weeks ended July 30, the company's net earnings increased 2.9 percent to $58.7 million or $0.50 per diluted share.

J. Crew Reports Q2 Loss

J. Crew Group Inc., which went public in June, reported Aug. 24 that revenues for the second quarter ended July 29 increased 17 percent to $269.2 million. Same-store sales increased 15 percent during the same period.

The New York-based multichannel apparel merchant's retail and factory sales increased 21 percent during the quarter to $197.4 million while direct sales rose 7 percent to $62.8 million.

J. Crew also reported a net loss applicable to common shareholders of $2.8 million, or $0.08 per diluted share compared to $1.6 million, or $0.07 per diluted share in the second quarter of fiscal 2005.

For the six month period ended July 29, revenues increased 16 percent to $509.9 million. Same-store sales rose 24 percent during the same period. Retail and factory sales increased 18 percent to $364.5 million, while direct sales increased 9 percent to $129 million.

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