Pier 1 Imports shares surged today, up more than 30 percent in morning trading, after reporting better-than-expected profits for its third quarter and an upturn in sales following the presidential election.
The Fort Worth-based home furnishings retailer, which lost money in the first half of the year, said late Wednesday that net income for the three months ended Nov. 26 was $13.6 million, compared to $10.9 million a year ago. Net sales declined slightly, to $475.9 million from $478 million, but comparable-store sales, a key benchmark, increased by 1.8 percent. And e-commerce sales totaled $97.4 million, growth of about 28 percent.
Wall Street was also heartened by the company’s revised guidance for the full year. Pier 1 said it now expects comparable store sales for its fiscal year ranging from down 2 percent to flat, compared to its projection of down 2 to 4 percent provided three months ago. The company now sees adjusted earnings per share of 37 to 41 cents per share for the year, up from 24 to 32 cents.
Pier 1 shares (ticker: PIR) closed up $2.09 cents a share to $8.57 on the New York Stock Exchange.
The news comes as CEO Alex Smith prepares to leave after running the company for 10 years, having announced in September that he will retire at the end of the year. Pier 1 said Wednesday that Terry London, the company’s chairman, will take over as interim president and CEO on Jan. 1 while the board continues to work with Korn Ferry to search for a new chief executive.
“The mists that have been swirling around our company for several quarters now are clearing,” Smith said on his final quarterly conference call with analysts. “What you can now see is our wonderful brand which has always been known for its unique merchandise, loyal customer base and customer-centric culture.”
Pier 1 has struggled to maintain profits as it has invested to boost its e-commerce business and omnichannel service. With sales soft and profits squeezed by promotional pricing, Alden Global Capital, a New York hedge fund, revealed this fall that it had acquired a 9.5 percent stake and threatened to seek seats on the company’s board.
London, a former CEO at Gaylord Entertainment, has been a member of Pier 1’s board of directors since 2003 and chairman since June 2012.