Pier I Imports' stock rises 275% on March 23
Reflects positive analyst comment, improving balance sheet
Furniture Today Staff -- Furniture Today, March 24, 2009
FORT WORTH, Texas — Pier 1 Imports' stock shot up 275% Monday in the wake of a positive comment by an industry analyst and a strengthening of the company's balance sheet.
The Fort Worth-based retailer's stock closed Monday at 60 cents per share, well above the low of 10 cents per share that the stock had reached in recent weeks.
On Friday, Pier 1 had reported a net loss of $29.4 million or 33 cents per shares in the fiscal fourth quarter, ended Feb. 28, as sales fell 10.9% and same-store sales slid 9.7%. The loss compares with net income of $13.7 million or 16 cents per share in the fourth quarter of the previous fiscal year.
But the retailer also announced that a foreign subsidiary of Pier 1 had purchased $79 million of the company's convertible senior notes for $27 million. The transaction allowed the company to reduce its outstanding debt by $79 million on a consolidated basis.
Budd Bugatch, an industry analyst with Raymond James Financial, wrote in a note to clients Monday that the action will remove the debt from the retailer's balance sheet.
"The company continues to improve its liquidity position and has a balance sheet that we believe will carry it through the downturn," he wrote.
Monday was a good day for nearly all of the industry's publicly traded stocks as the market rallied on news of the proposed federal plan to help banks unload their toxic assets.
