Updated from 2:09 p.m. EDT

As shares of

Williams-Sonoma

(WSM) - Get Report

plunged about 30% Monday, Lynn Detrick, an analyst at

Sanders Morris Harris

, re-read her notes from an upbeat meeting the home furnishings retailer hosted just 11 days ago. The Sept. 28 tour of a Memphis distribution facility, source of last year's earnings shortfall in the crucial holiday quarter, showed the center was ready to handle this year's rush.

But in hindsight, Detrick said, a few cryptic words from the San Francisco-based company's chief executive might have foreshadowed far worse problems. Earnings will fall short of Wall Street's expectations by 12 cents to 14 cents a share, the company announced Monday, touching off the stock plunge.

"Certainly, there were some statements that could have been construed negatively made at the meeting," though discussions of current business trends were sparse, said Detrick, who rates the stock hold and whose firm has not done underwriting for the company. "Howard Lester did make such a comment which I wrote down in my notes," she added, referring to Williams-Sonoma's chief executive.

She was not alone. Lester's words were fresh in the minds of several analysts Monday, though few had issued negative reports.

"The company said they were, quote, working hard to make the third quarter, unquote, which caused some people to be concerned," said Kim Galle, an analyst for

Advest

. Galle rates the stock buy, and Advest has not done underwriting for the company. Ralph Jean, an analyst for

First Union Securities

, remembered the same words. He rates the stock market perform and his firm has not done underwriting for the company.

Eleven days ago, "life was great," Jean said. "The whole purpose of the analyst meeting was to show Wall Street how they've turned around and improved the Memphis facility. And now this."

This, specifically, was an announcement Monday that earnings for the third quarter ending Oct. 29 will be 4 cents to 6 cents a diluted share. Analysts polled by

First Call/Thomson Financial

had predicted earnings of 18 cents a diluted share. The company attributed the shortfall to lower-than-expected sales from fall and early holiday catalog mailings, higher catalog advertising costs and depressed gross margins in the retail division.

Williams-Sonoma also said that John Tate, senior vice president and chief financial officer, had resigned effective Nov. 1 to join another company. He is being replaced by Sharon McCollam, the vice president of finance.

Since the Sept. 28 analysts meeting, William-Sonoma's stock has tumbled from $39.31 to $26.88 before Monday's announcement. Williams-Sonoma finished Monday regular trading down $7.88, or 29%, at $19.

Through the plunge, analysts have issued reports on the company bearing cheery titles like "Analyst Day Upbeat," by

Robertson Stephens

, and "What a Difference a Year Makes," from

WR Hambrecht & Co

.

According to Joe Cooper, a researcher for First Call, only Dan R. Wewer, an analyst at

Deutsche Banc Alex. Brown

, has altered his predictions for Williams-Sonoma's earnings since the meeting. On Oct. 2, Wewer lowered his third-quarter forecast to 16 cents a share from 18 cents and lowered his fourth-quarter estimate to $1.05 a share from $1.08.

David Ricci, analyst for

William Blair

, moved a penny a share in earnings from the third to the fourth quarter, reducing his third-quarter estimate to 17 cents a share from 18 cents, Cooper said.

"I would say nobody expected the magnitude of this miss," said Jean, the First Union analyst.

Tracy Brown, a spokeswoman for Williams-Sonoma, declined to comment. But the company said in a statement that it, too, was surprised.

The slowdown in sales is disappointing and unexpected, said Gary Friedman, president of Williams-Sonoma. "It has changed in recent weeks and we are reacting aggressively."

Even without Lester's comments, analysts said investors might have been nervous about Williams-Sonoma, whose holdings include the Pottery Barn chain. Signs of slowing consumer spending bode poorly for retailers who deal in quintessentially non-essentials, and if the troubles are at Pottery Barn, they could affect many other retailers.

"Retail hard goods have been so far immune to the slowdown that has hurt apparel," said Galle, the Advest analyst. "This may be the first sign that we're going to see some slowing there too."

Brian Postol, analyst for

A.G. Edwards & Sons

, said Pottery Barn seemed to be the likely culprit for the difficulties at the company, which several analysts accused of growing too aggressively and paying too little attention to its product offerings.

Especially in a period of slowed consumer spending, "there's just not a reason to buy more stuff if it's stale," Postol said. In his view, Pottery Barn's recent offerings appear to be "a lot of designs of the same product. It might be a stack of four cubes and now they're putting them across." He rates the stock neutral, and his firm has not done underwriting for the company.