reiterated fourth-quarter earnings guidance Thursday and said it would wind down the Hold Everything chain and fold its merchandise into other lines.
The Pottery Barn owner expects to earn $1.07 to $1.09 a share on net revenue of $1.205 billion to $1.220 billion in the fourth quarter. Analysts surveyed by Thomson First Call were forecasting earnings of $1.09 a share on sales of $1.22 billion.
Williams-Sonoma said fourth-quarter comparable-store sales should rise 4% to 5% from a year ago, compared with previous guidance for a rise of 3% to 5%. For the eight weeks ended on Christmas, overall sales rose 12% to $868.7 million on a 4.5% rise in same-store sales, the company said.
Estimates exclude charges related to the exiting of Hold Everything, where, despite opportunities for growth, it has become "strategically and financially advantageous for us to capitalize on these opportunities by leveraging the marketing authority, multi-channel expertise, and scale of our other brands, particularly Pottery Barn and West Elm," the company said.
Williams-Sonoma will immediately begin transitioning Hold Everything's merchandising strategies into its other brands while it winds down current Hold Everything retail and direct-to-customer operations. It expects to cease all marketing under the Hold Everything brand name by the end of 2006.
The closure will result in an after-tax charge of $10 million to $12 million, or 9 cents to 10 cents a share, with 8 cents or 9 cents of it recorded in the fourth quarter.
The stock closed Wednesday at $45.09.