Pier 1 reports lower profit as sales softened in April

Pier 1 Imports said profits fell more than 50 percent in its first fiscal quarter as the retailer experienced soft sales in April. But the company said sales are improving and maintained its guidance for the full year.

The Fort Worth-based home furnishings retailer said net income was $6.9 million for the three months ended May 30, down 54 percent compared with $15.1 million in the first quarter of 2014. Revenues grew 3.1 percent to $432 million.

Chief Executive Officer Alex Smith said comparable store sales grew 4 percent in May and are picking up.

“March was nearly as strong, while we experienced some slower weeks during the month of April, similar to what many others in the industry have observed,” Smith said. “Now that we are into June and at the leading edge of our summer clearance event, company comparable sales are trending in excess of May results.”

The company has been investing to expand its online business, adding new systems and a fulfillment center. During a conference call with analysts, Smith said e-commerce accounted for 17 percent of sales in the quarter, up from 9 percent a year ago.

Executives said the retailer would increase the number of net store closures this year, to 30 from 10 previously planned, as its retail network contracts while online sales grow. Pier 1 operates more than 1,000 stores.

“The capital reduction of our real estate footprints will allow us to drive growth to our omni-channel model, reduce store occupancy and payroll costs and improve efficiency,” Smith said.

For the full year, the company forecast comparable sales growth, includes e-commerce, of 3 to 5 percent, compared to prior guidance for mid-single digit growth, and earnings per share in the range of 83 to 87 cents a share.

Pier 1 shares (ticker: PIR) bounced higher in after-hours trading Wednesday but gave up those gains today. The stock was off 3 cents at $11.98 a share in morning trading.

The retailer said it ended the quarter with $97 million in cash and cash equivalents. Inventories totaled $501.7 million at the end of May.

This story was originally published June 17, 2015 at 3:32 PM with the headline "Pier 1 reports lower profit as sales softened in April."