Rough First Quarter For Williams-Sonoma

The harsh economy and grim real state market continue to take a toll on home goods merchants. First-quarter sales for cataloger/retailer Williams-Sonoma fell 21.8%, to $621 million, from $782 million last year. Retail sales decreased 17.6%, to $358 million, from $434 million last year.

The high-end kitchen and home goods seller’s direct-to-customer sales (catalog/Internet) dropped 27%, to $254 million, compared to $348 million in the first quarter last year. Internet sales slipped nearly 23%, to $194 million, from $252 million.

San Francisco-based Williams-Sonoma’s net loss was $18.7 million, compared to net income of $10.4 million in the first quarter last year. Same-store sales sank 21%.

Company chairman/CEO Howard Lester said in a release: “While the home furnishings sector continued to be under significant pressure in the first quarter, we focused on the aspects of the business we could control and delivered substantially better-than-expected earnings results.”

Lester added that the company saw its revenue stabilize within its range of guidance, “and we were able to enhance profitability by reducing our advertising expense as a percentage of revenue and optimizing our promotional activity. We also successfully lowered our merchandise inventories, reduced our capital spending and once again improved our year-over-year cash position.”