Pier 1 3Q sales rise 10%
By Clint Engel -- Furniture Today, December 21, 2003
Fort Worth, Texas — Pier 1 Imports posted gains in sales and earnings in its third quarter, but warned the Christmas selling season had gotten off to a weak start, and earnings this quarter and for the full year are expected to be down.
In the quarter ended Nov. 29, the specialty retailer reported a 3.5% increase in net income to $32.2 million from $31.1 million in the same period a year ago. Earnings per share rose 6.1% to 35 cents from 33 cents.
Sales for the quarter increased 10% to $482.4 million, while same-store sales increased 1.6%.
For the nine months, Pier 1's net income was down 7.5% to $69.7 million on a 6.4% increase in sales to $1.3 billion. Same-store sales declined 2% in the nine-month period.
"Looking forward, sales continue to build each week in December and we still have over 50% of the month's business ahead of us," said Pier 1 Chairman and Chief Executive Officer Marvin Girouard.
But through mid-December, traffic was weak throughout the country, hurt further by snowstorms in the Midwest, Mid-Atlantic and Northeast, he said. As a result, business has not been as strong as the company expected, and it now projects fourth-quarter same-store sales will be flat to down 5% from the same period a year ago.
Earnings per share for the final quarter are projected to be in the range of 52 cents to 58 cents, and from $1.28 to $1.34 for the year ending Feb. 28, compared to $1.36 the previous year.
Industry analysts had been projecting fourth-quarter earnings of about 64 cents per share and $1.40 per share for the year, according to news reports.
One of the bright spots in the first two weeks of December was Pier 1's furniture business, which was up about 15%, Girouard said in a conference call with the investment community.
On the down side, Girouard described a recent Sunday as one of his most disappointing days, noting that newspaper inserts failed to draw strong traffic and Pier 1 missed its target sales goal by $2 million.
While the company doesn't want to raise false hopes, Girouard believes there's a chance for an upsurge in buying just before Christmas. Speaking on Dec. 16, he said, "We know the next nine days are really important," and the days after Christmas are key also.
During the third quarter, the company opened 55 Pier 1 stores and relocated or closed 13. It also opened nine Cargokids stores, ending the period with 1,166 stores in the United States, Puerto Rico, Canada, Mexico and the United Kingdom.
The company is on plan to open a net 81 new stores this year and will nearly double the size of Cargokids with the opening of a net 23 stores on its base of 25 Cargokids at the beginning of the year.
In March, Pier 1 will kick off a marketing campaign featuring Thom Filicia as its spokesman. Filicia is founder of New York design firm Thom Filicia Inc. and best known as the interior design expert on Bravo's hit television show, "Queer Eye for the Straight Guy."
In the marketing campaign, labeled "Get in Touch With Your Senses," Filicia will replace actress Kirstie Alley, who has appeared in the Pier 1 campaign for the past three years, helping raise the retailer's national profile.
"Thom's authority in the design industry will help establish Pier 1 stores as a pre-eminent home furnishings and decorating resource, giving our brand appeal to a broader audience and driving increased traffic into our stores," Girouard said.
| Quarter ended 11/2920032002Change | |||
|---|---|---|---|
| Sales | $482,444,000 | $438,501,000 | 10.0% |
| Operating income | 64,101,000 | 61,604,000 | 4.1% |
| Net income | 32,194,000 | 31,100,000 | 3.5% |
| Earnings per share | 0.35 | 0.33 | 6.1% |
| 9 months ended 11/29 | 2003 | 2002 | Change |
| Sales | $1,312,987,000 | $1,233,832,000 | 6.4% |
| Operating income | 147,907,000 | 153,581,000 | (3.7%) |
| Net income | 69,692,000 | 75,354,000 | (7.5%) |
| Earnings per share | 0.76 | 0.79 | (3.8%) |
