On May 30, Williams-Sonoma (NYSE:WSM) released first-quarter earnings for the period ended April 29.

  • Sales rose 2.7%, retail revenues increased 4.5%, direct-to-customer sales increased 0.6%, and same-store sales fell by 0.8%.
  • Because of increased markdowns and cost of merchandise sold in the Pottery Barn & Pottery Barn Kids brands, gross margins declined by 150 basis points.
  • For the second quarter, management projects revenue to be in the range of $855 million to $873 million, and EPS between $0.14 to $0.18 per share.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$816.1

$794.3

2.7%

Net Profit

$18.2

$23.1

(21.4%)

EPS

$0.16

$0.20

(20.0%)

Diluted Shares

112.4

117.7

(4.6%)

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

37.0%

38.5%

(1.5)

Operating Margin

3.5%

4.4%

(0.9)

Net Margin

2.2%

2.9%

(0.7)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$117.4

$250.5

(53.1%)

Accounts Rec.

$43.6

$58.9

(26.0%)

Inventory

$639.4

$547.6

16.8%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$156.1

$185.0

(15.6%)

Long-Term Debt

$12.8

$14.4

(10.9%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

($124.7)

($77.6)

N/A

Capital Expenditures

$31.9

$39.0

(18.3%)

Free Cash Flow

($156.6)

($116.6)

N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.