Pier 1 drives 2Q profits up almost 60 percent
Furniture Today Staff -- Furniture Today, September 19, 2002
Fort Worth, TX — Second-quarter profits at Pier 1 Imports rocketed up by 59.9 percent, to $22.1 million from $13.8 million last year, as the home goods retailer bulked up its margins and kept cutting costs.
Pier 1 sales, still on the fast track, climbed by 15.0 percent, to $410.9 million from $357.2 million, as the company layered on $26 million in new sales through a combination of strong same-store sales and rapid expansion. The crucial gauge of same-store sales rose by 5.8 percent during the period, far outpacing growth for most other American retailers, and illustrating the continued resilience of home goods suppliers in an otherwise weak retail environment.
Fueling an earnings jump of almost two-thirds, Pier 1 boosted its average gross margin by 160 basis points, or 1.6 percentage points, to 40.1 percent from 38.5 percent the prior year. Gross margin dollars swelled by 19.9 percent, to $164.9 million from $137.5 million last year. In another big lift to the bottom line, the retailer kept chopping away at costs, reducing its expense rate by 50 basis points, to 28.9 percent of sales from 29.4 percent.
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