Williams-Sonoma Earnings Slip

Williams-Sonoma Inc. posted net earnings of $18.8 million for the second quarter, a decrease from net earnings of $25.9 million in the prior year.

The direct marketer and retailer reported net revenue of $819,6 million for the quarter ended Aug. 3, a 4.6% decrease from to $859.4 million last year.

The San Francisco company posted direct marketing revenue of $356.4 million for the quarter, a 4.3% drop from $371.7 million in the prior year.

The firm said its gross margin was 34% compared to 37.2% in the prior year. Management attributed this to an increase in cost of merchandise sold and an increase in inventory related reserves, partially offset by the favorable benefit of the company’s ongoing replacement and damages initiatives.

“We were disappointed by the degree to which the macro-economic environment deteriorated in the second quarter – the impact of which was progressively declining comparable store sales throughout the quarter,” said CEO Howard Lester, in a statement. “Despite this trend, we were particularly pleased with the results associated with our catalog optimization and returns, replacement and damages initiatives, which drove better than expected savings for the quarter.”