Pier 1 Imports’ CEO stepped down and the retailer said it is exploring strategic alternatives after a difficult third quarter, when comps sharply declined and the company reported a net loss.
Comparable sales decreased 10.5% compared to the third quarter of fiscal 2018 ended December 1. Net sales decreased 11.9% to $413.2 million compared to $469.2 million for the third quarter of fiscal 2018.
The company reported a net loss of $50.4 million, or negative $0.62 per share, including the negative impact of $20.8 million, or negative $0.26 per share, related to a non-cash charge to establish a valuation allowance against certain deferred tax assets. This compares to net income of $7.4 million, or $0.09 per share, a year ago.
Pier 1 has appointed Cheryl Bachelder, a member of the company’s board of directors, as interim CEO, effective immediately. Bachelder succeeds Alasdair James, who has stepped down from the company.
Pier 1 said it would take actions to position the company for long-term growth and profitability. Additionally, the company has reduced its planned capital expenditures for fiscal 2019 from $60 million to $40 million, and is implementing a more rigorous cost reduction program that is expected to generate annualized expense savings beginning in fiscal 2020.
The company’s board has also initiated a process to evaluate a full range of strategic alternatives and has retained Credit Suisse to assist in this effort.
“We are pleased to have a proven executive of Cheryl’s caliber stepping into the CEO role on an interim basis. Cheryl brings to Pier 1 a strong track record of leadership, execution and building shareholder value. We are confident that she is the right person to oversee the actions necessary to strengthen the business and place the company on a path to growth as we work to evaluate the most effective avenues to create value for all shareholders,” said Terry London, chairman of the Pier 1 board of directors.
Bachelder stated in part, “Clearly the ‘New Day’ strategic plan did not deliver the desired results fast enough. We will need to promptly narrow our strategic focus and hone our execution in a way that reinvigorates our top-line sales with a distinctive Pier 1 style and value proposition for our customers, while re-engineering our cost structure for sustainable profitability. I look forward to outlining a new action plan in short order.”