Shares of Pier 1 Imports fell more than 4 percent on Thursday after projecting that fourth-quarter earnings would end up lower than analysts predicted despite stronger-than-expected revenues.
Same-store sales -- at stores open at least a year -- increased 7.9 percent for the three months ended March 2, it said, compared with the excellent 10.3 percent hike for the same period last year.Alex W. Smith, Pier 1's CEO and president, expressed optimism for the new fiscal year."We are confident that fiscal 2014 will be another terrific year as we continue our evolution into a true multi-channel retailer, exploiting the growth potential in our two mutually supportive and interdependent businesses -- our wonderful Pier 1 Imports stores and our new, two quarters-old e-commerce business," Smith said in a prepared statement.On Thursday, Pier 1 predicted fourth-quarter net earnings would range from 57 cents to 58 cents per share while equity analysts had estimated 61 cents. The Fort Worth-based home furnishings retailer will report the year-end results on April 11."We continue to believe the (Pier 1) story remains very compelling," wrote analysts at KeyBanc Capital Markets, which retained a "buy" recommendation and $24 price target. The stock [ticker: PIR] fell 96 cents, or 4.13 percent, to close at $22.28.The retailer "continues to post same-store sales that are among the best in our coverage, and we remain very positive on the company's strategic direction, marketing and merchandising initiatives, and ability to gain market share," KeyBanc said in a research note.The lower earnings forecast reflects an estimated 2 cent negative impact from a higher-than-expected tax rate, KeyBanc said, prompting it to lower its own prediction to 58 to 60 cents.Pier 1 also noted that gross profit rose to 46.2 percent of sales for the fourth quarter, compared to a margin of 45.5 percent for the same period last year."Store-level merchandise margins are expected to be essentially flat year-over-year," KeyBanc said. "We believe consolidated merchandise margin, which includes e-commerce, could be under more pressure as online sales grow within the mix." Pier 1 relaunched online sales last summer.Barry Shlachter, 817-390-7718Twitter: @bshlachterHave more to add? News tip? Tell us
