• Cecile Corral

Pier 1 Profitable in Third Quarter, Optimistic About Fourth Quarter

Pier 1 Imports Inc. embarked on its "return to profitability in the third quarter — a period the special home retailer said was one of many gains.

"Well, what a difference a year makes," said Alex Smith, president and ceo during the company's conference call with analysts in December. "Comparable stores sales increases, strong merchandise margins and net profit, and a strong balance sheet all added up to a gratifying and successful quarter."

While 1,059-unit Pier 1 had anticipated its third quarter comp stores sales to show improvements over last year's same period, a better-than-expected 13.7% gain "demonstrates to us that both new and loyal customers are responding well to our merchandise and in-store experience."

Average transaction improved, and comp increases were consistent across product categories, Smith said.

For the third quarter, ended November 28, Pier 1 reported total sales increased to $327 million from $301 million in the year-ago quarter.

Net income came in for the quarter at $39 million, or $0.37 per share, versus a net loss of $37 million, or $0.41 per share, for the same period last year. Excluding charges, net income would have been $2 million compared to a The company noted its merchandise margins improved as a direct result of strong initial mark-ups and significantly reduced clearance activity.

Year-to-date results included a sales decline to $895 million from $931 million in the year-ago period, a comparable store sales decline of 0.6%, and net income of $52 million, or $0.55 per share, versus a net loss of $100 million, or $1.12 per share, for the same period last year.

Looking ahead, Pier 1 plans to close fewer stores during the fourth quarter than previously reported — 40 as opposed to the original projection of 50 closings.

Year to date, the company has closed 33 locations and expects to close seven more stores in January and February.

Cecile CorralCecile Corral | Senior Product Editor, Home & Textiles Today
ccorral@homeandtextilestoday.com

Cecile B. Corral has been a product editor with Home Textiles Today since late 2000. She covers the area and accent rug, kitchen textiles, table linens, beach towels, decorative bath and decorative pillow categories, as well as some retail subjects.

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