Pier 1 Imports profit falls 48%
By Larry Thomas -- Furniture Today, April 25, 2005
Fort Worth, Texas — Specialty retailer Pier 1 Imports eked out a 1.6% sales gain in its year ended Feb. 26, but net income plunged 48.8%.
The chain, whose sales have been under increasing pressure in recent months, racked up $1.9 billion in sales in the year. However, sales at stores open at least a year, a key measure of a retailer's health, declined 5.8% from the prior year.
Net income for the year totaled $60.5 million, or 68 cents per share, compared with $118 million, or $1.29 per share, a year earlier. Operating income was off 35% to $154.1 million.
In the fourth quarter, sales dropped 5.3% to $525.8 million, and net income declined 61.1% to $18.8 million, or 21 cents per share. The fourth-quarter figure included a one-time charge of 5 cents per share for a lease accounting adjustment.
Same-store sales were off 10.7% in the quarter.
"Fiscal year 2005 was a challenging year for Pier 1," said Chairman and CEO Marvin Girouard. "Although net income was down, we believe that critical investments were made in longer-term strategies with major changes in merchandising, marketing and store operations."
The company said it didn't expect significant improvements in the first quarter of the current fiscal year. Same-store sales dropped 18.2% in March, and Girouard said he's expecting a decline of 8% to 12% for the quarter.
He also forecast a net loss of 3 cents to 10 cents per share. Analysts, on average, had been forecasting a profit of 10 cents per share.
The company recently launched a new advertising campaign aimed at driving more consumers into its stores, but Girouard said it hadn't had an immediate effect on store traffic.
"Our new advertising campaign did not launch until late in the month, and store inventories continued to be below plan," he said.
Total sales for the five weeks ended April 2 dropped 12.4% to $147.6 million, the company said.
| Pier 1 Imports | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 2/26 | 2005 | 2004 | Change |
| (a) Includes a $3.9 million after-tax non-recurring charge for a lease accounting adjustment. | |||
| Sales | $525,826,000 | $555,256,000 | (5.3%) |
| Operating income | 46,226,000 | 89,177,000 | (48.2%) |
| Net income | (a)18,799,000 | 48,309,000 | (61.1%) |
| Earnings per share | 0.21 | 0.53 | (60.4%) |
| Year ended 2/26 | 2005 | 2004 | Change |
| Sales | $1,897,853,000 | $1,868,243,000 | 1.6% |
| Operating income | 154,052,000 | 237,084,000 | (35.0%) |
| Net income | (a)60,457,000 | 118,001,000 | (48.8%) |
| Earnings per share | 0.68 | 1.29 | (47.3%) |
