Pier 1 Sales Slip In Challenging Q3

For its third quarter ended November 28, Pier 1 Imports posted net income of $10.9 million, or 13 cents per diluted share, versus $17.9 million, or 20 cents per diluted share, in the 2014 third quarter. Comparable store sales slipped 0.7%.

Pier 1 earnings beat a MarketBeat analyst average estimate by a penny.

Net sales slipped 2.5% to $472.5 million versus $484.5 million in the corresponding period a year earlier, Pier 1 reported. Operating income was $19.7 million in the third quarter versus $31.8 million in the prior-year period.

On a constant currency basis, net sales decreased 1.4% and comparable store sales increased 0.5%, the company asserted.

Alex Smith, Pier 1 president and CEO, stated, “Our sales slowed in the third quarter, primarily reflecting soft store traffic. Notwithstanding, we’re pleased with store conversion, a testament to the exemplary job our store teams did in engaging with Pier 1 Imports’ customers. E-commerce sales continued to demonstrate strong growth and represented approximately 16% of total sales in the period. Although top line results did not meet our expectations, strict expense control enabled us to deliver earnings per share within our guidance range. Additionally, we made further progress toward bringing our inventories in line, keeping us on track to close fiscal 2016 with inventory levels down approximately 10% from the prior year.”

Smith added, “We’re pleased with how the Pier 1 Imports brand is positioned for holiday, including our merchandise, stores and website. However, the decline of the casual in-store shopper continues to challenge us. We are revising our full-year outlook based on a moderate start to the holiday shopping season and an increasingly competitive promotional environment. We remain confident in our ‘1 Pier 1’ omni-channel strategy, particularly as the retail climate continues to undergo dynamic change. Our teams are focused on reducing inventories, improving promotional effectiveness and driving efficiency in our distribution network, as well as tactical strategies to strengthen customer engagement and attract new customers to the brand.”     

Pier 1 opened two stores during the third quarter, ending the period with 1,055 retail locations.