Williams-Sonoma: Too Much Slicing and Dicing?

Marek Fuchs, who offers video commentary on TheStreet.com, always makes me cringe with his shrill, whiny delivery, his hyperbole, his overreliance on clichés, and his often-misplaced or overblown criticisms of the business press. But he made a good—albeit poorly expressed and fairly obvious—point today in a short video about Williams-Sonoma.

The seller of kitchen gadgets and equipment, and owner of Pottery Barn, reported second-quarter profits on Wednesday that were better than expected. Investors went crazy. The shares were up by around 12 percent in midday trading.

The profits came mostly from cost-cutting. But as Fuchs noted nasally, revenues are still heading south. Sales are, he said nonsensically, "underground—we're talking Middle Earth where the Hobbits live."

Middle Earth, of course, isn't in the middle of the Earth.

But the point remains—revenues are sinking for Williams-Sonoma (WSM), though not for "Williams and Sonoma," as Fuchs repeatedly called the company.

The market reaction is just the usual short-term Wall Street psychosis, best expressed by a headline on Dividend.com: "Williams-Sonoma's Q2 Profit All but Vanishes, Still Beats View ..."