Earnings Preview: Williams-Sonoma

| About: Williams-Sonoma Inc. (WSM)

Williams-Sonoma (NYSE:WSM)) is expected to report Q3 earnings before market open Thursday Dec. 4, with a conference call scheduled for 10am ET.


Analysts are looking for a loss of (12c) on revenue of $746.78M. The consensus range is (19c)-0c for EPS, and revenue of $731.5M-$815M, according to First Call. In October, the company lowered its Q3 EPS view to (12c)-(10c) from 0c-4c on revenue of $723M-$742M, lowered from $802M-$820M. Williams-Sonoma also lowered its FY08 EPS view to 11c-33c from 89c-$1.01 vs. First Call consensus of 21c and its revenue view to $3.274B-$3.344B from $3.572B-$3.638B vs. First Call consensus of $3.59B.

Analyst Views

Merrill Lynch analyst Alan Rifkin believes the worst of a sales shortfall announcements are behind the retailer, and says Williams-Sonoma is one of the strongest brands in all of hardlines. While he sees a difficult 2H09 and FY2010, he says improved inventory position and significantly easier comps will pave the way for improvement. He also says the company is controlling costs and sees the opportunity for the company to reduce rents on existing and future sites.

Cowen said preliminary Black Friday sales results indicate discounters continue to gain share in home furnishings, which means sales of bigger discretionary items at Williams-Sonoma are likely to suffer. The firm says valuation indicates a neutral risk/reward scenario although operations should remain under heavy pressure heading into the holiday season.