Pier 1 Off To Shaky Start With Soft Q1

For the first quarter ended May 30, Pier 1 Imports posted net income of $6.9 million, or eight cents per share, versus $15.1 million, or 16 cents per share in the period a year ago. Total sales for the first quarter increased 3.1%, or 3.9% on a constant currency basis, to $432 million, compared to $419.1 million in the same period last year, while comparable sales increased 2% or 2.8% on a constant currency basis.

Earnings matched a Thomson Reuters analyst average estimate.

“We are pleased to deliver earnings per share in line with our expectations, reflecting revenue growth of 3%, as well as careful attention to expense control,” said Alex Smith, Pier 1 president and CEO. “E-commerce continues to perform exceptionally well, generating strong improvement across all performance metrics, and accounting for nearly 17% of total sales in the quarter.”

He added, “From a top-line perspective, we exited the quarter with May company comparable sales growth of 4%. March was nearly as strong, while we experienced some slower weeks during the month of April, similar to what many others in the industry have observed. Now that we are into June and at the leading edge of our summer clearance event, company comparable sales are trending in excess of May results.”

Although earnings met an average analyst estimate, Wedbush Morgan analyst Seth Basham, in a research note, pointed out that the comp gain in the quarter came at the expense of profits as weak April sales resulted in May promotions. He observed that “deteriorating in-store POS sales trends, accelerating promotions, bloated inventories and distribution problems” would continue to impact Pier 1 performance for some time.