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Pier 1, Select Comfort sag

By Larry Thomas -- Furniture Today, December 3, 2006

Fort Worth, Texas — Specialty retailer Pier 1 Imports and airbed maker and retailer Select Comfort issued gloomy sales reports last week, highlighting the continued weakness in the home furnishings and housing markets.

Pier 1 said sales for the four weeks ended Nov. 25 were 14.7% below the same period last year, while Select Comfort slashed 2006 earnings projections.

Select Comfort, which generates most of its sales through company-owned stores, had been forecasting 95 to 97 cents per share, but cut the projection to 80 to 87 cents.

The airbed manufacturer and retailer said sales in the first eight weeks of the fourth quarter, ending with the Thanksgiving weekend, were up 6% from the comparable period a year earlier, but same-store sales declined 9%. Total unit volume increased 8% from a year ago.

Comparisons during the holiday weekend were especially difficult because of a price increase on Nov. 29, 2005, which led to a spike in sales a year ago, the company said.

At Pier 1, meanwhile, the November sales drop included a same-store sales decline of 15.3% for that month.

"Despite aggressive marketing and promotional efforts in November, our sales results in the home furnishings categories remain weak," said Marvin Girouard, chairman and CEO.

Sales in the retailer's third fiscal quarter weren't much better. Total sales for the period were $402.7 million, down 11.8% from last year's third quarter. Same-store sales declined 12.9%.

Pier 1's sales for the first nine months of the fiscal year were down 9.5% to $1.2 billion, with same-store sales dropping 11.6%.

Bill McLaughlin, chairman and CEO of Select Comfort, said the company has noted a closer correlation in its business with housing industry trends.

"Our sales programs and promotional offers have been consistent with prior years, and we are protecting product margins," McLaughlin said.

But he said the company is "looking internally for answers, not pointing to external factors. We have moved quickly to revamp our December sales and marketing programs to drive traffic, increase referrals from our existing bed owners and enhance consumer interest through financing and other purchase incentives."

He added the company is working on initiatives to contribute to its growth in 2007 and future years.

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Airbed specialist Select Comfort cuts 2006 earnings forecast

Nov 30, 2006

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