Report: Analyst Says Williams-Sonoma Risks Breaching Financial Covenant in 4Q

Chicago Shares of Williams-Sonoma may trade lower in the coming months amid growing concern that the parent company of the Williams-Sonoma and Pottery Barn brands may violate a financial covenant, a Barclays Capital analyst said, the Associated Press reported.

Analyst Michael Lassert said the retailer could encounter problems with its $300 million credit facility by the end of its fiscal fourth quarter in February.

"What this would likely pose more headline risk than actual liquidity risk, we believe the uncertainty would weigh on the shares in the near term," Lassert told investors in a research note published Tuesday, according to the report.

Lassert said he expects the chain will try to amend the covenant, which could increase borrowing costs.