Pier 1 loses $36.9M
By Furniture Today Staff -- Furniture Today, December 21, 2008
FORT WORTH, Texas — Pier 1 Imports reported a 17.8% same-store sales decline in the fiscal third quarter ended Nov. 29 as its loss ballooned to $36.9 million, compared with a $10 million loss in the same period a year earlier.
Total sales for the Fort Worth-based retailer fell 19.6% from a year ago, to $300.9 million.
Alex Smith, president and CEO, said the results were “extremely disappointing, but not a surprise. That said, we know our merchandise offering and in-store experience are significantly better than last year. I am very pleased with what our team has delivered, and in any normal environment, we would have been rewarded at the cash register.”
He said conversion rates were good, but the average ticket was lower. Traffic declines were smaller in December than in October and November, he said.
Smith said the company's plan to return to profitability in the next fiscal year was going well until August, but that the recession has “slowed our speed and increased our timeline.” But he added, “We remain very optimistic about the future prospects for the brand.”
For the first nine months of the current fiscal year, sales were $931.4 million, down 13.4% from a year earlier. The net loss was $99.8 million, compared with a loss of $109.7 million a year ago. Same-store sales were down 8.9%.
Merchandise margins for the quarter were 52.5%, compared with 53% a year ago.
Pier 1 said it expects the current economic environment to continue “well into” the next fiscal year and possibly longer. In anticipation, the retailer said it is taking a conservative approach to merchandise purchases, expense planning and capital expenditures.
The company said it has sufficient liquidity to fund operations and capital requirements.
The company also said that it has been notified by the New York Stock Exchange that it was not in compliance with requirements for continued listing because its stock price has fallen under $1. It closed Dec. 17 at 43 cents. Pier 1 said it “intends to cure the deficiency” within the required six months.
| Quarter ended 11/29 | 2008 | 2007 | Change |
|---|---|---|---|
| Sales | $300,906,000 | $374,181,000 | (19.6%) |
| Operating income | (27,448,000) | 2,197,000 | — |
| Net income | (36,855,000) | (9,962,000) | — |
| Earnings per share | (0.41) | (0.11) | — |
| 9 months ended 11/29 | 2008 | 2007 | Change |
| Sales | $931,420,000 | $1,075,122,000 | (13.4%) |
| Operating income | (70,118,000) | (72,682,000) | — |
| Net income | (99,835,000) | (109,749,000) | — |
| Earnings per share | (1.12) | (1.25) | — |
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