Shares of Pier 1 Imports dove more than 12 percent Thursday after the company said its December sales were disappointing and lowered its fourth-quarter and full-year profit forecasts.
The Fort Worth-based home decor company said that sales at stores open at least a year rose 1.3 percent for the five weeks that ended Saturday but that the figure was lower when accounting for a calendar shift.
Pier 1 said that there was an extra week in fiscal 2013. Before adjusting for the calendar shift, Pier 1 said sales at stores open at least a year fell 5.7 percent in fiscal December, compared with an 8.2 percent increase for the year-ago period.
Pier 1 joined several other retailers, including American Eagle Outfitters and Bed Bath & Beyond, that cut expectations for the fourth quarter based on soft holiday sales.
Alex Smith, president and CEO of Pier 1, said in a statement that the company is “extremely disappointed” in its performance, particularly given its strong sales over the Black Friday weekend. Smith said bad weather in the first half of December hurt Pier 1’s performance for the rest of the month and into January.
Smith said online sales remain strong, making up about 4 percent of total sales in fiscal December. The company’s website averaged 2.2 million visitors per week in December.
Pier 1 stock (ticker: PIR) closed down $2.88 a share at $20.44.
For the fiscal fourth quarter, Pier 1 now expects earnings of 47 to 52 cents per share. Its prior guidance was for 60 to 66 cents per share. Sales are expected to rise by a low- to mid-single-digit percentage rate. Sales at stores open at least a year are expected to be flat.
Analysts polled by FactSet expected earnings of 63 cents per share.
The retailer now foresees fiscal 2014 earnings of $1.07 to $1.12 per share, down from its previous forecast of $1.21 to $1.27.
Revenue is expected to climb by a mid- to high-single-digit percentage rate, with sales at stores open at least a year up by a low- to mid-single-digit percentage rate.
Pier 1 said it will report its fourth-quarter and full-year results April 10.
Teen retailer American Eagle Outfitters reported Thursday that sales at stores open at least a year fell 7 percent in the nine weeks that ended Saturday.
And on Wednesday, Bed Bath & Beyond, which also owns Cost Plus World Market, lowered its earnings forecast for the fiscal fourth quarter and full year after its third-quarter results missed analysts’ expectations.