Pier 1 Imports reports quarterly profit of $61.7 million

Posted Friday, Apr. 12, 2013  comments  Print Reprints
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FORT WORTH -- Pier 1 Imports reported a profit of $61.7 million for its fiscal fourth quarter, as growing online sales bolstered the home decor chain's results.

Total sales for the quarter improved 15.7 percent to $551.6 million, the company said. And comparable-store sales -- a key measure of sales at stores open at least a year -- increased 7.9 percent compared to a 10.3 percent increase last year.

But shares of Pier 1 (ticker: PIR) fell 18 cents to close Thursday at $23.16, apparently hurt by a moderate earnings-per-share forecast of $1.26 to $1.31, compared to the $1.38 consensus by analysts, said Budd Bugatch of Raymond James, who maintained his "strong buy" recommendation.

Alex Smith, Pier 1's president and CEO, called fiscal 2013 an outstanding year that included making several improvements to the shopping experience, including launching an e-commerce website in July and partnering with Alliance Data on a rewards credit card.

"We have laid the foundation to take the company to a new level of growth and we're focused on executing the strategies to get there," Smith said.

The fourth-quarter profit compared to $115.2 million a year ago, when results were inflated by a tax benefit. Not counting that gain, earnings per share for the three months ended March 2 were 58 cents vs. 48 cents a year ago.

For fiscal 2013, Pier 1 recorded a $129.4 million profit, or $1.20 a share, compared to a $168.9 million profit, or $1.48 a share, in fiscal 2012. Same-store sales increased 7.5 percent for the year, the company reported. Total sales for fiscal 2013 increased 11.2 percent, to $1.7 billion.

Pier 1's revamped website is getting more than 1 million visits a week, growing at a double-digit rate and racking up an average ticket that's nearly double that of in-store shoppers, Smith said. Additionally, 30 to 35 percent of online purchases are picked up in-store, which helps Pier 1 because it does not have to pay fulfillment and shipping costs while allowing customers to add items during their visit, the analyst noted.

Smith said the company recently added bedding as an online-only merchandise extension.

"Our stores are a gateway to our online business," Smith said. "Our website is a gateway to the store's business. ... No other home specialty retailer will be able to offer their customers 1,100-plus stores where they can browse and purchase from an in-store assortment, an online assortment or a combination of both."

Plans call for Pier 1 to close 14 stores, open 30 new ones, refurbish 50 and remodel six this year.

Smith also said it has more than 1 million active rewards card holders, who accounted for 25 percent of total U.S. sales.

When an analyst noted new home-decor rollout by the rival Target chain, the British-born merchant said retail competition is as intense as ever. But Smith asserted that when other chains aren't doing well, they've "tried to copy us. We keep an eye on that."

"Usually, when people copy us, they are pretty poor imitations of the authentic Pier 1 products," the CEO added. "So we say, 'That's fine. Let them get on with it,' and we will continue to drive our creative processes here and make sure that we stay in front."

Sandra Baker, 817-390-7727

Twitter: @SandraBakerFWST

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