Business

Pier 1 stock plummets more than 25% after disclosing sales shortfall, CFO’s departure

Pier 1 Imports has launched a search for a new chief financial officer to replace Cary Turner, who is retiring.
Pier 1 Imports has launched a search for a new chief financial officer to replace Cary Turner, who is retiring. AP

Shares of Pier 1 Imports plunged more than 25 percent today, a day after the the company said it would miss sales and earnings targets for the fourth quarter and announced that its longtime chief financial officer, Cary Turner, has retired.

In a bluntly worded news release released after the close of trading on Tuesday, CEO Alex W. Smith said the Fort Worth home furnishing retailer’s comparable-sales growth in January was 5.7 percent, well below a forecast “which had overestimated the recapture of lost sales from last year’s storms.” He said the company was also more cautious about February sales and had revised its earnings guidance as well.

“The failure to adequately forecast the revenue and expenses in our business is a financial issue which has been aggressively addressed,” Smith said in the statement.

Pier 1 now expects to earn 80 to 83 cents a share for the fiscal year to end Feb. 28, down from a projection of 95 cents to $1.05. The company plans to release its results April 8.

Pier 1 shares (ticker: PIR) were off $3.54 a share, or about 26 percent, at $13.43 in late morning trading. Before the drop, Pier 1 shares had gained 10 percent this year.

In a note to clients, Brian Nagel, an analyst at Oppenheimer & Co., said “we are shocked and very disappointed by Tuesday night’s announcement. It is now clear that our call that the ‘worst was over’ for Pier 1 was premature.”

Bloomberg News reported that Nagel also said he views Turner as a “fall guy” for the recent blunders, despite helping to build the company’s turnaround effort that began several years ago.

The company named Laura A. Coffey interim chief financial officer and said it has launched a search for a permanent replacement.

Turner had served as chief financial officer since 1999, under both Smith and his predecessor, Marvin Girouard. In a separate statement, Smith said Turner had been “an integral part of the Pier 1 Imports family for more than 23 years” and cited his role in helping the company through a financial turnaround in the past decade.

Coffey, 48, has been with Pier 1 in various roles since 1997. Most recently, she has served as senior vice president of planning, overseeing implementation of the new website and omni-channel capabilities.

“We are delighted and fortunate to have Laura serve as interim CFO,” Smith said in a statement. “She is a strong and experienced executive who brings both financial and operational expertise to this role. Having been with Pier 1 Imports for over 17 years, Laura has a keen understanding of our business, culture and long-term vision.”

This article includes material from Bloomberg News.

Steve Kaskovich, 817-390-7773

Twitter: @stevekasko

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