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Williams-Sonoma 4Q profit rises, lifts dividend

SAN FRANCISCO (AP) -- Williams-Sonoma Inc.'s fourth-quarter net income jumped 9 percent to beat market expectations on gains at its West Elm brand and the benefit of an extra week in the period.

The San Francisco company also said that it is increasing its quarterly dividend by 41 percent and plans to repurchase shares. The news sent the home furnishing company's shares up sharply in after-hours trading Tuesday.

Williams-Sonoma, like many retailers, has struggled with the impact of the tough economy and increased competition. The owner of the Williams-Sonoma, Pottery Barn, Rejuvenation, West Elm and Mark and Graham brands said Tuesday that its performance has improved and it sees room for growth ahead.

The company earned $133.7 million, or $1.34 per share, for the quarter ended Feb. 3. That is compared to net income of $122.6 million, or $1.17 per share, the prior year. Its total revenue increased nearly 11 percent to $1.41 billion from $1.27 billion with gains in sales made in stores, online and from its catalogs.

Analysts polled by FactSet, on average, expected the company to earn $1.29 per share on revenue of $1.4 billion for the period.

Williams-Sonoma also said that it is increasing its quarterly cash dividend by 41 percent to 31 cents per share. The dividend is payable May 24 to shareholders of record April 26. It also plans to buy back up to $750 million of its stock over the next three years under a share repurchase program.

Company CEO and President Laura Albers said the company's announcements reflect the power of its business model, which relies heavily on a mix of brands and means for consumers to shop. It also confirms the company's confidence in its growth potential, which includes expansion into new markets like Australia this year.

Williams-Sonoma expects to earn $2.65 to $2.75 per share for the year on revenue between $4.20 billion and $4.28 billion. Analysts were expecting the company to earn $2.82 per share on revenue of $4.23 billion.

It forecast earnings in its first quarter between 33 and 36 cents per share on revenue between $850 million and $870 million. Analysts had forecast earnings of 39 cents per share on revenue of $866.6 million.

Shares of the company jumped $2.61, or nearly 6 percent, to $47.82 in after-hours trading. Its stock fell 34 cents to close the day at $45.21.