Pier 1 posts 4Q loss
By Clint Engel -- Furniture Today, April 9, 2006
Fort Worth, Texas — Pier 1 Imports reported a $10 million loss in its fiscal fourth quarter, citing a dip in same-store sales, a loss from its former United Kingdom retail operation and charges related to speeding up the closing of weak stores.
The net loss for the period ended Feb. 25 was a turnaround from an $18.8 million profit in the same period a year ago. Sales from continuing operations increased 0.7% to $506 million, while same-store sales fell 2.9%.
The 1,259-store company also said it needs to reclassify cash flow related to the securitization of credit card receivables, which will require it to restate cash flow statements from the previous two fiscal years.
The Top 100 company, which has suffered from a series of losses and same-store sales declines in recent quarters, said the fourth-quarter loss included a $3 million after-tax loss from discontinued operations — U.K.-based The Pier, which it sold recently for about $15 million. The other $7 million in losses were related to charges for certain corporate and field administration restructuring and the move to accelerate the closing of poor-performing stores.
After a reevaluation of its real estate this past year, Pier 1 decided to close 38 stores last year and 35 this year, up from previous plans to close 27 and 20 stores, respectively.
It plans to open about 40 Pier 1 stores this fiscal year, but no new Pier 1 Kids stores. In a conference call, Pier 1 Chairman and CEO Marvin Girouard said that over the next two years the company probably won't open many new stores unless some great opportunities arise.
For the full fiscal year ended in February, Pier 1 posted a $39.8 million loss, including a $12.3 million loss from the discontinued operations, compared with a $60.5 million profit the previous year.
Sales from continuing operations fell 2.7% to $1.78 billion and same-store sales fell 7.1%
Girouard said the company's turnaround strategy, which includes changes in merchandising, marketing and real estate positioning, is moving forward and added that during the fourth quarter, Pier 1 made progress towards its plans to improve results this year.
"We believe that by the end of the first quarter and into the beginning of the second quarter, we will begin to see notable improvement in customer traffic," said Girouard.
| Pier 1 Imports | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 2/25 | 2006 | 2005 | Change |
| (a) Includes results from discontinued operations, including a net loss of $3 million in the 2006 quarter, income of $1.5 million in the 2005 quarter, a net loss of $12.3 million in the 2006 year and a loss of $2.3 million in the 2005 year. The 2006 losses include a $7.4 million non-cash, pretax impairment charge to state the investment in the discontinued operation, The Pier, at estimated fair value. The 2006 periods also include a net loss of $7 million associated with closing stores and restructuring certain operations. |
|||
| Sales | $506,022,000 | $502,278,000 | 0.7% |
| Operating income | 4,097,000 | 44,128,000 | — |
| Net income (a) | (9,976,000) | 18,799,000 | — |
| Earnings per share | (0.11) | 0.21 | — |
| Year ended 2/25 | 2006 | 2005 | Change |
| Sales | $1,776,701,000 | $1,825,343,000 | (2.7%) |
| Operating income | 13,417,000 | 154,011,000 | — |
| Net income (a) | (39,804,000) | 60,457,000 | — |
| Earnings per share | (0.46) | 0.68 | — |
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Pier 1 posts $10 million 4Q loss
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