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CompaniesLuxury and discount retailers diverge (again)

The latest installment in the luxury retailers vs discounters in the US.

Shares in Williams-Sonoma, the US owner of its namesake brand, as well as the Pottery Barn and West Elm shops, jumped 8 per cent on Thursday after the company said full-year profits and sales would top Wall Street estimates.

Fourth-quarter sales rose 4 per cent from a year earlier to $1.4bn, while profits were little changed at $134m, or $1.38 per share.

Results were buoyed by 18 per cent same-store sales growth at West Elm and 15 per cent rise at Pottery Barn.

Williams-Sonoma anticipated full-year sales between $4.6bn and $4.7bn, with earnings as high as $3.15 a share. Wall Street analysts had forecast earnings of $2.82 on revenues of $4.4bn.

Of the results, chief executive Laura Alber said:

We believe that our lifestyle merchandising approach, together with our high-touch service model, separates us from commoditized offerings as we help our customers decorate, entertain, and create the homes of their dreams.

By contrast, discounter Dollar General, forecast full-year earnings would be $3.55 per share, more than a dime below Wall Street forecasts, and said severe weather continued to hamper its results.

Chief executive Rick Dreiling said he remained "cautious on the current operating environment" and the challenges facing his customers.

Shares in the company fell 3 per cent to $57.80.

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