Tough times continue for Pier 1, as the company’s first quarter comparable sales declined 13.5% while its net loss deepened.
For the first quarter ended June 1, the retailer reported a net loss of $81.7 million, or $19.97 per share, versus a net loss of $28.5 million, or $7.11 per share, in the period a year earlier. A MarketBeat-published analysis consensus estimate for Pier 1’s first quarter net loss was $13 per share.
The figure in the first quarter of this fiscal year includes transformation costs of $19 million primarily related to professional fees, the company maintained.
The company posted net sales of $314.3 million in the quarter versus $371.9 million in the period a year prior. Operating loss for the first quarter of fiscal 2020 was $76.6 million compared to operating loss of $31.3 million for the previous-year period.
Cheryl Bachelder, Pier 1 interim CEO, said, “Our teams are laser focused on the initiatives under our fiscal 2020 action plan, which is designed to reset our operating model and rebuild our business for the future. We believe Pier 1 has strong brand equity and a loyal customer who will return for the right style stories in our assortment. As we expected, our sales and margins remained under pressure in the first quarter, and we anticipate this will continue through the second quarter. This reflects our decision to take aggressive clearance actions to move through lower-priced, lower-margin goods and ensure we provide our customers with a strong, on-brand style statement for fall.”
She continued, “We have chosen to prioritize our comp sales recovery with the implementation of new merchandising and marketing initiatives supported by substantive cost cutting actions. Importantly, we remain on track to achieve the previously outlined benefits of $100 to $110 million this year and now expect the substantial majority of those benefits to be realized through cost reductions. The expense savings we plan to realize in the second half of fiscal 2020 are expected to be absorbed by reduced gross margins rather than driving the full year net income and EBITDA recapture we previously outlined. As we implement our fiscal 2020 action plan, we are incorporating our learnings and addressing business trends in real-time. We are committed to restoring the health and promise of the Pier 1 brand and believe our initiatives and liquidity will give us sufficient runway to achieve our fiscal 2020 goals.”