Business

New CEO at Pier 1 Imports says there is ‘much to be done’

Pier 1 Imports operates 1,016 stores in North America, including this location in Southlake.
Pier 1 Imports operates 1,016 stores in North America, including this location in Southlake. Star-Telegram

Pier 1 Imports’ new chief executive officer Alasdair James may have a tougher job ahead of him than Wall Street expected.

The company posted lower sales and a quarterly loss for the three months ended May 27, missing analysts estimates and sending Pier 1 stock down more than 10 percent after-hours trading.

But the company maintained its annual earnings guidance of 46 to 52 cents a share and sees net sales growth of 1.5 percent to 2.5 percent.

The results suggest that the Fort Worth-based housewares chain remains mired in an industry rut that has forced retailers to rely on ample discounts to lure shoppers into stores. The company’s loyal customer base and growing e-commerce presence aren’t enough to drive growth, according to Alasdair James, a former Kmart executive who took the reins as president and CEO on May 1.

“There is still much to be done to build the business to its full potential,” James said in a statement Wednesday.

Alasdair James
Alasdair James Courtesy of Pier 1 Imports

James succeeded Alex Smith, who left Pier 1 at the end of 2016 after leading the company for about 10 years. The company finished off last year on a high note, recording higher profits for the fourth quarter. Improved results drove the stock higher, prompting the New York hedge fund Alden Global Capital, which had accumulated a nearly 10 percent stake, to sell its shares.

On his first conference call with analysts, James said the company would explore different product assortments in an effort to reach new customers. He also said the company had just hired a new chief information officer who would look to use artificial intelligence and machine learning to improve the company’s approach to analytics.

The company reported a first-quarter loss of $3 million compared with a loss of $6 million a year ago, as net sales dropped modestly to $409.5 million. The company said e-commerce grew to 24 percent of total sales, up from 19 percent a year ago, though comparable-store sales were flat.

The company closed the quarter with 1,016 Pier 1 stores, down two, and still expects to reduce its store base by 20 to 25 stores in the current fiscal year.

The results were released after the close of trading on Wall Street Wednesday. Pier 1 shares (ticker: PIR) closed at $5.38 cents a share, and then lost 58 cents in after-hours trading. The stock has trailed down after nearly reaching $9 a share earlier this year.

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This article includes material from Bloomberg News and Star-Telegram archives.

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