Business

Pier 1 Imports shares sink on quarterly loss, sales decline

Pier 1 CEO Alex Smith said first-quarter sales were “not as strong as we would have liked.”
Pier 1 CEO Alex Smith said first-quarter sales were “not as strong as we would have liked.” Special/Brandon Wade

Shares of Pier 1 Imports sank 6 percent in after-hours trading on Wednesday after the Fort Worth-based home furnishings chain reported lower sales and weak guidance.

The retailer reported a $6 million loss for its first fiscal quarter ended May 28 compared with a $6.9 million profit a year ago. Quarterly sales decreased 4.3 percent to $418.4 million, while comparable-store sales declined by 2.5 percent.

Still challenged by costs related to expanding online distribution centers, promotions and soft store traffic, the company said it was lowering its guidance for the next quarter and full year.

It is projecting a loss in the second quarter, as high as 6 cents a share, and comparable-store sales ranging from negative 1 percent to positive 1 percent. For the full year, Pier 1 now sees earnings in a range of 32 to 40 cents a share. The results were released after regular trading had closed on Wall Street. Pier 1 shares (ticker: PIR) then dropped 25 cents, or 4.6 percent, to $5.19.

“Our first quarter sales were not as strong as we would have liked,” said Alex W. Smith, president and CEO, in a statement. “Although many of our merchandise categories performed satisfactorily, outdoor furniture was affected by internal and external pressures, including competitive pricing. At the same time, the headwind of a challenging store traffic environment remains.”

Pier 1 has been adjusting to the shift in retail traffic from stores to online sites. The company’s e-commerce business has been growing but traffic in its stores has lagged. Meanwhile, the business has battled inventory issues prompting more sale prices than desired.

Smith said the company hopes to improve its performance in the second half of the year. “Our focus hasn’t changed — deliver unique merchandise offerings, become more efficient across all parts of our business, attract new customers to our brand and continue to engage and retain Pier 1 Imports loyalists.”

Steve Kaskovich: 817-390-7773, @stevekasko

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