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Williams-Sonoma 4Q Profit Rises, Cautious About 2008

BY CSA STAFF

San Francisco Williams-Sonoma Inc. on Thursday posted a higher quarterly profit but gave a cautious outlook for the current fiscal year, citing a challenging economic backdrop.

“As we look forward to 2008, we believe we will be operating in one of the most challenging macro-economic environments we have seen in many years,” CEO Howard Lester said in the earnings release.

The retailer said its fiscal fourth-quarter profit rose 3%, helped by an extra week in the period. It reported that net income climbed to $124.6 million from $121.1 million a year earlier.

Revenue for the period ended Feb. 3 grew 9% to $1.37 billion from $1.25 billion. Meanwhile, retail revenue gained 8% to $846.6 million.

For the year, earnings fell 6% to $195.8 million from $208.9 million in the prior year. Full-year sales increased to $3.94 billion, up 6% from $3.73 billion.

Given the increasingly challenging home-furnishings industry, Williams-Sonoma said it would focus on reducing catalog circulation, containing discretionary costs and aggressively managing inventory.

“To support future growth, in 2008 we are planning to increase retail-leased square footage by approximately 8% by adding 29 net new stores and expanding or remodeling an additional 20 stores,” Lester said in the statement. “West Elm, with 12 new stores, will contribute approximately one-third of this leased square-footage increase.”

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Pep Boys posts 4Q sales loss

BY CSA STAFF

PHILADELPHIA The Pep Boys announced that sales for the fourth quarter ended Feb. 2 were $517.6 million, as compared to the $578 million recorded for the fourth quarter ended February 3, 2007. Excluding the 14th week of fourth quarter 2006, comparable-merchandise sales decreased 4.4% and comparable-service revenue decreased 1%.

The company reported a fourth quarter net loss of $18.5 million, or 36 cents per share – basic and diluted, from net earning of $7.9 million, or 15 cents per share – basic and diluted, for the same period last year. According to Pep Boys, the net loss included $8.5 million of margin reductions related to the exiting of non-core merchandise, $6.2 million in store closure costs and $6 million in debt pre-payment costs.

Sales for the fiscal year ended Feb. 2 were $2.14 billion as compared to the $2.24 billion recorded last year. Excluding the 53rd week of 2006, comparable-merchandise sales decreased 4.2% and comparable-service revenue increased 1.8%.

Net loss increased from $7.07 million, or 13 cents per share – basic and diluted, to  $37.4 million, or 72 cents per share – basic and diluted. 

President and ceo Jeff Rachor commented, “While the difficult economic backdrop created sales challenges during the fourth quarter, we are pleased to confirm that our progress to date leaves us well positioned to complete this first important step in our strategic plan by the beginning of the second quarter of this year.

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ALDI launches ‘smart’ ad campaign

BY CSA STAFF

NEW YORK ALDI has launched a new television campaign in the United States.

The four commercials center on the themes of “musical,” “soccer mom,” “extended family” and “dinner party.” Each one presents a different scenario, i.e. shopping for a big family, or putting together the perfect dinner party, and ties into the ALDI motto of “shopping smart.”

The commercials can be viewed on ALDI’s Web site.

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