ATLANTA (Reuters) - Home-goods retailer Williams-Sonoma Inc reported a smaller-than-expected quarterly loss on Thursday and said it amended a $300 million credit line providing for more relaxed covenants, sending its shares up 10 percent.
The company also said that it had terminated a $150 million stock buyback program to conserve cash, and stood by a previous forecast calling for lower profit for the current holiday quarter.
The operator of Pottery Barn and Williams-Sonoma stores posted a third-quarter loss of $11 million, or 10 cents a share, compared with a profit of $27.1 million, or 25 cents a share, a year earlier.
Analysts' average forecast was a loss of 11 cents a share, according to Reuters Estimates.
Revenue fell 16 percent to $752.1 million as sales across the Williams-Sonoma, Pottery Barn and Pottery Barn Kids brands weakened. Sales at stores open at least a year were off 21.4 percent.
Gross margin contracted to 32 percent of sales from 38.2 percent a year earlier, hurt by increased price markdowns.
Cash and cash equivalents came to nearly $23 million as of November 2, compared with $16.3 million a year earlier and about $119 million in February.
Home furnishings retailers have come under tremendous pressure as the softer U.S. economy and continuing housing slump have depressed sales. Going-out-of-business sales at Linens 'n Things, which is closing stores after filing for bankruptcy earlier this year, are also weighing on the sector.
Earlier this week, Bed Bath & Beyond
Last month, Pier 1 Imports
Williams-Sonoma stood by its October forecast calling for profit of 10 cents to 30 cents a share for the fourth quarter on revenue of $940 million to $1 billion. It said it expects full-year earnings of 27 cents to 47 cents a share, compared with an October forecast of 25 cents to 47 cents.
Analysts expect a profit of 19 cents a share for the fourth quarter, down from $1.15 a year earlier, according to Reuters Estimates.
For 2009, Williams-Sonoma said capital spending is expected to be $95 million to $105 million, down from $190 million to $200 million forecast for 2008.
The company said it successfully amended a $300 million unsecured revolving credit line and a $165 million commercial letter of credit reimbursement facility to provide for more flexible terms. The changes include limits on the company's ability to increase dividends and wider interest rate spreads.
Williams-Sonoma shares were up 77 cents, or 10 percent, to $8.44 in morning New York Stock Exchange trading. Bed Bath & Beyond was up 53 cents, or 2.4 percent, to $23.02, and Pier 1 was down 1 cent to 57 cents.
(Reporting by Karen Jacobs; editing by John Wallace, Dave Zimmerman)
