Pier 1 Imports reports higher sales, profit, dividend

Posted Thursday, Dec. 19, 2013  comments  Print Reprints
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Pier 1 Imports bounced back from a disappointing second quarter with stronger sales and profit in the three months ended Nov. 30. The company rewarded shareholders with a 20 percent dividend increase.

The Fort Worth-based home furnishings retailer reported Thursday that net income increased by 13 percent to $26.8 million as sales increased by 9.6 percent to $465.5 million. Same-store sales, those at stores open at least a year, increased by 6.9 percent.

And even though the company reduced its guidance for 2014 earnings to a range of $1.21-$1.27 a share, down from $1.23-$1.29, the company’s stock (ticker: PIR) jumped more than 5 percent. The shares closed at $21.79, up $1.06.

Alex W. Smith, president and chief executive officer, said the company’s promotional marketing drove store traffic and produced “a new, all-time sales record for both Black Friday and the full post-Thanksgiving weekend.” However, winter storms disrupted business at stores during the first two weeks of December, he said.

The company’s e-commerce site, Pier1.com, “continues to outperform our expectations, representing over 4 percent of total sales in the third quarter, and reflecting increases in both traffic and conversion,” Smith said.

“We feel very good about our positioning and the execution of our holiday plans. Our holiday assortments have been very well received, as have our merchandising, marketing and customer engagement activities. We fully expect to capture additional market share over the holiday period,” Smith said.

In September, Pier 1 fell short of Wall Street expectations for the second quarter. Smith said the company’s marketing initiatives didn’t properly highlight promotions, resulting in less-than-expected traffic in stores.

But in the most recent quarter, the company changed its strategy and increased television advertising, which helped drive strong traffic, Smith said during a conference call.

The company’s revamped e-commerce business, launched last year, continues to expand. Under Pier 1’s “omni-channel” approach, customers can order online and pick up their goods at neighborhood stores.

“We expect e-commerce and store sales to become increasingly interconnected,” Smith said. “The traditional role of the store expands to also become a showcase and an advice center for our online assortments, a convenient location to pick up an online order or to return an online purchase.”

Smith said Pier 1 has been adding employees to support its growing business while trying to remain “fiscally prudent.” But in response to an analyst’s questions about expenses, he made it clear that the company is getting bigger.

“We’re all about growth and expansion and we’re certainly going to invest in our people,” Smith said.

Pier 1 expects to end its fiscal year with 1,073 stores, 11 more than a year ago.

Pier 1’s board declared a quarterly dividend of 6 cents a share, payable Feb. 5 to shareholders of record on Jan. 22.

Steve Kaskovich, 817-390-7773 Twitter: @stevekasko

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