Upscale home furnishings retailer Williams-Sonoma Inc reported higher-than-expected quarterly profit on Wednesday on an improvement at its Pottery Barn chain, sending its shares up as much as 11 percent.
Net income for the second quarter ended on July 29 fell to $25.97 million, or 23 cents a share, from $35.56 million, or 30 cents a share, a year earlier.
Excluding one-time items, the company reported a quarterly profit of 24 cents a share.
Analysts on average had expected earnings of 16 cents a share, according to Reuters Estimates.
Sales rose 4.1 percent to $859.4 million but were below estimates of $862.65 million. Quarterly sales at stores open at least a year increased 1.2 percent.
Chief Executive Howard Lester said in a release that the home furnishings market remained challenging during the quarter.
What was particularly encouraging about these results, he added, was the strong performance of our emerging brands and the improving trend we saw in Pottery Barn, which we believe was driven by early successes in the rollout of our Pottery Barn revitalization initiatives.
The company raised its full-year forecast to reflect the better-than-expected second quarter, but left its outlook for the second half of the year unchanged.
For the year, Williams-Sonoma now expects earnings of $1.82 to $1.90 per share, excluding items, up from a previous range of $1.76 to $1.84, on revenue of $3.95 billion to $4 billion.
Analysts have expected the company to post a full-year profit of $1.79 per share on revenue of $3.97 billion, according to Reuters Estimates.
Williams-Sonoma expects sales at stores open a least a year to be flat to up 1.5 percent.
The company affirmed its third-quarter outlook for earnings per share before items of 22 cents to 27 cents on revenue of $887 million to $907 million. Analysts have expected earnings of 24 cents per share and $896.99 million in revenue.
For the fourth quarter, Williams-Sonoma reiterated its expected profit of $1.20 per share to $1.26 per share. Analysts have expected $1.23 per share.
Williams-Sonoma shares were up $1.83, or 6.2 percent, at $31.40 in morning New York Stock Exchange trade after rising as high as $32.85 earlier in the session.