Market to Williams-Sonoma: Drop Dead (Update)

These days, "less worse than we were expecting" is often enough to buoy a company's shares. Not so for Williams-Sonoma (WSM Quote).

The smaller-than-expected loss that the company posted this morning sent shares of the home-furnishing company down more than 10% to $13.25 in morning trading. The company also announced that, as a result of the uncertain economy, it is maintaining its full-year forecast.

The operator of the Williams-Sonoma, Pottery Barn and West Elm chains recorded a loss of $18.7 million, or 18 cents a share, compared with a profit of $10.4 million, or 10 cents per share, in the year-ago period.

Excluding asset impairment and early lease termination charges for closing underperforming stores, the loss was 14 cents per share, far better than analysts' expectations of a loss of 21 cents.

Revenue fell 22% to $611.6 million from $781.8 million last year. Total same-store sales declined 21%.

The company said it still expects full-year earnings in the range of a loss of 7 cents to a profit of 11 cents a share.

It's hardly a state secret that shoppers are trading down and cutting back on discretionary purchases. While small household fixer-uppers like paint and gardening supplies are doing well at retailers such as Lowe's(LOW Quote) and Home Depot(HD Quote), big ticket furniture, not so much.

But all is apparently not lost. J.P. Morgan analyst Christopher Horvers said in a note on Wednesday that there is still a chance the company's guidance is beatable.