Williams-Sonoma chief resigns

Jan 09, 2003 10:30 PM  By

The same day that cataloger/retailer Williams-Sonoma (NYSE: WSM) posted solid holiday sales, the company announced the abrupt departure of chief executive Dale Hilpert. No reason for the departure was given. He is being replaced with Edward Mueller, a member of the Williams-Sonoma board since 1999 and formerly CEO of SBC Communications.

Hilpert, who joined Williams-Sonoma in April 2001, was previously CEO of Venator Group, now Foot Locker. Wall Street reacted negatively to the news in midday trading. The stock was down as much as 10%, to $25.10 from its previous close of $27.99.

But Williams-Sonoma, whose catalogs include Pottery Barn, Hold Everything, and West Elm, had good news to report as well. Sales for the eight-week holiday period ending Dec. 29 were $620.0 million, up 15% from the comparable period of 2001. Direct-to-customer sales, which include catalogs, increased 13%, to $168.4 million (net of estimated returns). Retail sales increased 15%, to $420.4 million (net of estimated returns). Comparable store sales increased 3%, down from the previous year’s 6% increase.

As for earnings guidance, Williams-Sonoma chairman Howard Lester said that earnings per share will be $0.02 lower than expected due to Hilpert’s departure. “Solely due to these unplanned costs, we have revised our diluted earnings per share guidance for fourth quarter 2002 to $0.64-$0.65,” Lester said in a statement.