Pier 1 slumps in 2Q
By Janice Chamberlain -- Furniture Today, September 18, 2005
Fort Worth, Texas — Citing slow consumer response to new merchandising and marketing initiatives, specialty retailer Pier 1 Imports reported sales declines and net losses in both its quarter and six months ended Aug. 27.
Second-quarter sales slipped 3% to $438.6 million versus $452.3 million in the comparable 2004 period. The quarterly net loss was $10.2 million, compared with net earnings of $10.4 million in the year-ago quarter.
In the six months, Pier 1 recorded sales of $844.3 million, off 4.5% from $884.3 million in the same period last year. The net loss in the latest six months came to $22.6 million, measured against net profits of $22.2 million in the comparable 2004 period.
Same-store sales fell 7.7% and 9.8% in the quarter and six months, respectively.
Chairman and CEO Marvin Girouard said the company is responding to sluggish sales by "conservatively managing the business through cost containments, reducing store openings and taking heavy promotional discounts and markdowns to move slower-selling merchandise to make room for new arrivals.
"Although our results so far this year have been below our expectations, we believe that through recent customer research and feedback, the company is moving in the right direction by making immediate changes planned to positively impact the fall and holiday selling seasons."
Girouard added Pier 1 is using advertising to increase store traffic in the near term, with an emphasis on catalogs and new TV commercials to begin airing in October.
Pier 1's first national catalog, at 84 pages, was mailed two weeks ago to over 3 million households in the United States and Canada. A holiday catalog is scheduled in November and will be sent to a broader group of consumers.
In a conference call with analysts last week, Girouard said 26 stores had been hit by Hurricane Katrina and nine remain closed, with two or three of those stores suffering severe damage.
Chief Financial Officer Charles Turner said 16 new stores were opened in the second quarter and nine were closed, for a net gain of seven. This year, the company plans to open 68 stores and close 28. Next year, plans call for 45 new stores and the closure of 15.
The company declined to give quarterly earnings guidance, citing near-term unpredictability. However, Turner said Pier 1 anticipates same-store sales will be off in the low double digits in September, October same-store sales will be down 10% to 18%, and November comps will be in the positive low single digits.
Turner also said Hurricane Katrina will cost the company between 2 and 3 cents per share in earnings in the third quarter.
Girouard said Pier 1 was focusing on four primary goals: changing the creative direction of advertising and utilizing more TV ads and catalogs, reinvigorating product offerings, insuring Pier 1 prices stay competitive, and reinforcing the company's perceived quality with customers.
| Pier 1 Imports | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 8/27 | 2005 | 2004 | Change |
| (a) Includes income tax benefits of $7.4 million in the 2005 quarter and $14.8 million in the 2005 six months. |
|||
| Sales | $438,592,000 | $452,271,000 | (3.0%) |
| Operating income | (3,017,000) | 30,435,000 | — |
| Net income | (a)(10,185,000) | 10,446,000 | — |
| Earnings per share | (0.12) | 0.12 | — |
| 6 months ended 8/27 | 2005 | 2004 | Change |
| Sales | $844,301,000 | $884,298,000 | (4.5%) |
| Operating income | (9,059,000) | 62,514,000 | — |
| Net income | (a)(22,647,000) | 22,183,000 | — |
| Earnings per share | (0.26) | 0.25 | — |
-
Pier 1 2Q sales down 3%
Sep 15, 2005 -
Pier 1 loss balloons to $72.2M as sales dip
Dec 31, 2006 -
Pier 1 shrinks quarterly loss
Dec 23, 2007 -
Pier 1 sales drop 6.1% in 1Q as chain posts loss
Jul 3, 2005 -
Pier 1 posts $73.1M loss
Oct 1, 2006
Featured Company
-
Wright Labels
Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more
VIEW ALL GALLERIES
