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Market to Williams-Sonoma: Drop Dead (Update)

Williams-Sonoma posts a smaller-than-expected loss, but maintains cautious guidance.

These days, "less worse than we were expecting" is often enough to buoy a company's shares. Not so for


(WSM) - Get Williams-Sonoma, Inc. Report


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.

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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


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Home Depot

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, 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.

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