For the third quarter ended November 24, Pier 1 Imports, Inc. reported net income of $23.7 million, or 22 cents per share, versus $23 million, or 21 cents per share, in the year-prior period. Third quarter adjusted net income on a non-GAAP basis, which excludes the estimated impact of Hurricane Sandy and utilizes an estimated 35.6% annual effective tax rate for fiscal 2013, was $27.1 million, or 25 cents per share.
Pier 1 earnings per share beat a published Thomson Reuter’s average analyst estimate by a penny.
Comparable store sales increased 7.9% during the third quarter, while net income gained 10.9% to $424.5 million. Pier 1 attributed strong comp results in the period to increases in store traffic and average ticket.
Third quarter operating income increased 18% to $38.8 million, or 9.1% of sales, versus last year’s period, the retailer asserted.
Standard & Poors analyst Michael Souers, in a research note, said Pier 1 had gained significant market share, and he looked for improving operating margins in the immediate future, boosted by product mix, better terms from vendors, lease renegotiations and comp leverage against fixed costs. Longer term, he said, and despite a continuing soft consumer sales environment, the “admirable” job the company has done with product mix, particularly by providing more on lower-priced impulse items as traffic drivers, should allow the company to maintain and further margin improvements.
“Our third quarter results represent the 13th consecutive period of growth in comp store sales and earnings per share,” stated Alex Smith, Pier 1 president and CEO. “Our team continues to execute well, bringing the Pier 1 Imports customer a highly differentiated assortment of merchandise that keeps her coming back to both our stores and website. This marks the company’s first full quarter of e-commerce sales, and we’re pleased with the initial results, as the level of both new and existing customer visits indicates the long-term opportunity is significant. Indeed, we saw very strong traffic at both our stores and Pier1.com during the period, and trends have remained robust thus far in the holiday selling season.”
Smith said the combined strength of an extensive store base and e-commerce capabilities provides the retailer “with a powerful platform for growth. We are continuing to build out our multi-channel functionality and believe the business is ideally positioned to achieve the goals laid out in our three-year growth plan.”