Williams-Sonoma posts 1Q loss on 22% sales drop

San Francisco A 22% sales decline propelled Williams-Sonoma to a first-quarter loss, the company said Wednesday. Sales exceeded Street expectations, however.

Williams-Sonoma recorded a loss of $18.7 million, which included early lease termination charges for underperforming stores. In the same period last year, the company earned $10.4 million.

Sales dropped 22% to $611.6 million. Analysts expected sales of $609.9 million for the period ending May 3. Same-store sales declined 21%.

CEO Howard Lester said Williams-Sonoma reduced advertising expenses, lowered inventory and cut back on capital spending.

"While the home furnishings sector continued to be under significant pressure in the first quarter, we focused on the aspects of the business we could control and delivered substantially better-than-expected earnings results," Lester said in a statement.

On Wednesday, Chain Store Age reported that Williams-Sonoma planned to increase the number of lower-priced products at its Pottery Barn Kids stores starting this fall, citing parent Pottery Barn brand's success in shifting the product mix to lower price points without hurting initial product margins.