Positive traction at turnaround-bent Pier 1
April 10, 2008-- Home Textiles Today,
Forth Worth, Texas – Pier 1 Imports this morning reported its first profitable quarter in three years as well as its first positive comp performance since 2003.
For the fourth quarter ended March 1, the home décor specialty retailer generated net income from continuing operations of $13.7 million or 16 cents per share vs. a year-ago net loss of $58.7 million.
As president and ceo Alex Smith noted during a conference call with analysts today, the year-ago fourth quarter was “a bloodbath” as the company cleared out discontinued merchandise. One year later, he said, Pier 1 has improved its margins and conversion rates as well as strengthened its comp store sales.
“We are as relevant today as we always were,” said Smith.
He described inventory and sku levels as “about right.” The company has shortened the supply chain cycle and will continue to do so as it looks to reduce inventory in its distribution centers. Pier 1 expects a modest comp increase for the current fiscal year, but will be more focused on building margin.
Gross profit margins for 4Q were 31.8% of sales, up from 24.6% in the previous year. Although the company closed about 100 stores, gross profit dollars improved by more than $20 million, Pier 1 said.
Fourth-quarter sales fell 7.8% to $426.7, but comps bumped up 2.5% -- the first quarterly comp gain in 17 quarters by the company.
For the full fiscal year, the company reported a net loss for continuing operations of $96 million, or $1.09 per share. Sales dropped 6.9% to $1.5 billion.
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