Williams-Sonoma Profit Falls 42%
Atlanta Williams-Sonoma Inc. posted a 42% drop in quarterly profit on Wednesday and lowered its 2008 revenue forecast, sending its shares down as the soft U.S. economy and weak housing market hurt sales.
The operator of Williams-Sonoma cookware stores and Pottery Barn home-goods stores said earnings were $10.4 million for the first quarter ended May 4, down from $18.2 million a year earlier.
Revenue fell 4% to $781.8 million. Same-store sales fell 9%, hurt by weakness at outlet stores and Pottery Barn.
Williams-Sonoma said it now expects 2008 revenue of $3.74 billion to $3.80 billion, down from a previous forecast of $3.79 billion to $3.88 billion. Same-store sales are expected to fall as much as 8.3%, the company said.
Staples issues office products ultimatum
FRAMINGHAM, Mass. Staples increased its bid for Corporate Express and is making it harder for shareholders to vote against its unsolicited takeover proposal.
Early Tuesday, Staples announced an increased bid for Corporate Express and confirmed that shareholders owning approximately 23.3% of Corporate Express shares have already committed their shares to Staples and agreed to vote against Corporate Express’ planned merger with Lyreco. Corporate Express, based in Amsterdam, reached a merger agreement with French office products reseller Lyreco on May 21 after Staples formally launched its buyout offer on May 19. At a price of E9.15, Staples offer represents a premium of 116 to what the company’s calls Corporate Express’ unaffected share price of E4.32 of Feb. 4. Rumors of the possible combination sent shares of Corporate Express higher by the time Staples announced its bid of E7.15 on Feb. 19. That offer amount was subsequently increased to E8, with the latest increase to E9.15 representing an effort by Staples to provide Corporate Express shareholders an offer they can’t refuse. Corporate Express has scheduled a special meeting of shareholders for June 18 to vote on the Lyreco acquisition and Staples is urging them to reject that deal in favor of its offer.
“At our increased offer price, there is no question that Staples’ offer is the superior choice for Corporate Express shareholders,” said Ron Sargent, Staples chairman and ceo. “Staples’ offer provides certain and immediate cash value, without the significant risks found in Corporate Express’ long-term business plan, with or without Lyreco.”
Corporate Express, in a brief statement posted on its Web site, said it has noted the announcement by Staples of its increased offer. The statement said Corporate Express would carefully review the increased offer and make a further announcement in due course.
The last time Corporate Express made a similar comment in response to Staples offer it announced plans to acquire Lyreco, a deal Staples contends is fraught with execution risk for Corporate Express. Conversely, Staples points out that its acquisition of Corporate Express is relatively risk free from a regulatory standpoint. The all cash deal is already fully financed and has received antitrust clearance in the U.S. and Canada and Staples said it is confident that clearance in Europe would be granted prior to the June 18 meeting at which Corporate Express shareholders are to vote on their deal with Lyreco.
The combination of Staples and Corporate Express would create a global office products and business services powerhouse with estimated annual sales of roughly $28 billion, more than 2,000 domestic and international stores dominant position in the office products delivery business in the North American and European markets.
Walgreens May sales up 10%
DEERFIELD, Ill. Walgreens reported May sales of $5.o4 billion an increase of 10% from $4.58 billion for the same month in 2007. Sales in comparable-stores rose 3.9%, while comparable-store front-end sales increased 6%.
May front-end sales were helped in part by the allergy medicine Zyrtec, which recently switched from prescription to over-the-counter status, and by strong sales of consumables.
May pharmacy sales increased 8.3%, while comparable-pharmacy sales increased 2.8%. Comparable pharmacy sales were negatively impacted by 2.1 percentage points due to generic drug introductions in the last 12 months.
Pharmacy sales accounted for 64.8% of total sales for the month.