Williams-Sonoma’s second quarter results may have met Wall Street expectations, but shares dropped nearly 12% as a result of the company’s weak guidance for the third quarter of fiscal 2014 — which will include earnings from most of the back-to-school season.
For the quarter, the company posted net revenues of $1.04 billion, an almost 6% increase from $982 million a year ago. Total same-store sales increased 5.7%. Direct-to-customer revenues climbed 9.4%.
“We are pleased to have delivered another quarter of solid performance, once again demonstrating the competitive advantages resulting from our multi-brand, multichannel business model,” Laura Alber, president and CEO, said. “We enter the second half of 2014 well-positioned across our brands from a marketing, merchandise offering, store and online experience standpoint. We remain focused on disciplined execution against our growth initiatives and a balanced approach to capital allocation to continue to drive shareholder value.”
But the company anticipates third quarter revenue to be between $1.1 billion and $1.13 billion, earnings per share from 58 cents to 63 cents and comparable brand sales growth between 4% and 6% — all of which is below Wall Street expectations.
During fiscal 2014, Williams-Sonoma intends to open 33 new stores and close 24 existing stores across its five brands, for a net addition nine stores, bringing its total store count to 594.