Pier 1 posts larger-than-forecast loss in third quarter
Sales drop 11.8% for the specialty retailer; same-store sales down 12.9%
By Furniture Today Staff -- Furniture Today, December 14, 2006
FORT WORTH, Texas — Specialty retailer Pier 1 Imports said today it lost $72.7 million, or 83 cents per share, in its third quarter ended Nov. 25.
The loss, coming in a quarter when sales of $402.7 million were down 11.8% from the comparable period a year earlier, and same-store sales were down 12.9%, was 10 times the company’s loss a year ago and much greater than the 33 cents per share analysts were forecasting on average, according to Reuters Estimates.
Pier 1 took a charge of $24.8 million, or 28 cents per share, in the latest quarter for “store level asset impairment.” It also took charges of about $700,000 for adoption of a new accounting rule and $1.2 million for the sale of its credit card business.
Excluding charges in both quarters, it said the net loss in this year’s third quarter came to $46.1 million, or 53 cents per share, compared with $5.2 million, or 6 cents per share, a year ago.
Pier 1 said that for the first nine months of the fiscal year, it had a net loss of $168.9 million, or $1.94 per share, compared to a loss per share of $29.8 million, or 34 cents per share, a year earlier. Sales of $1.15 billion were down 9.5%, and same-store sales declined 11.6%.
Merchandise margins declined to 49.7% from 52.5% in the year-ago quarter due to increased promotional and markdown activity, which the company said reflected a focus to maintain appropriate inventory levels.“Trends so far in December are better than the trends seen in October and November,” said Chairman and CEO Marvin Girouard. “Despite weak sales in the home furnishing categories, early sales of our holiday merchandise have been encouraging.“Our efforts during the coming weeks will be concentrated on the holiday selling season,” he said. “We plan to continue the aggressive marketing program scheduled, while actively monitoring inventory levels so that they remain on plan as we head into fiscal 2008.”
