Under pressure to improve performance, Pier 1 Imports has updated its third quarter fiscal 2017 financial guidance to reflect recent business trends it presented in generally positive terms.
In September, just before reporting a loss and lower comparable store sales for the second quarter, Pier 1 announced it had put a poison pill defense in place after hedge fund Alden Global Capital informed the U.S. Securities and Exchange Commission that it had taken a 9.5% stake in the company. Alden Global stated that it was looking to have a voice in supervision of Pier 1 management, including a CEO search. Pier 1’s president and CEO Alex Smith is leaving the company at the end of the year.
“Our merchandise, promotional and marketing initiatives are resonating well with our customers,” Smith said. “Comparable sales quarter-to-date through October grew at a low single-digit rate. The election appears to have disrupted sales during the first ten days of November but we anticipate that sales trends will improve as we move through the month. We are seeing strength in our gross margin, a result of great merchandise, balanced promotional activity and efficiency improvements in the supply chain. Based on trends so far this quarter, we now expect our fiscal third quarter results to be at the high-end of our previously guided ranges for comparable and net sales, merchandise margin and earnings per share. The key portion of the holiday season is still ahead of us, and we are highly focused on strong execution of our holiday plans. We are seeing strength in all of our holiday categories, which bodes well for both sales and merchandise margin. Over the longer term, we will focus on the creation of unique merchandise assortments which define the Pier 1 Imports brand and continue to enhance our already significant omnichannel capabilities to help drive sales, expand market share and improve profitability.”
Pier 1 added that it would update fourth quarter and full-year fiscal 2017 financial guidance when the company reports results for the third quarter in mid-December.