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Pier 1 Imports surges to $38.8 million profit in quarter

Tax benefit boosts bottom line

Larry Thomas -- Furniture Today, December 17, 2009

FORT WORTH, Texas — Buoyed by a double-digit increase in same-store sales, retailer Pier 1 Imports reported a profit of $38.8 million in the quarter ended Nov. 28.

The quarterly profit, which equals 37 cents per share, reversed a net loss of $36.9 million or 41 cents per share in the same quarter last year.

Sales for the quarter, the third quarter of the retailer's fiscal year, were $327.1 million, an increase of 8.7% from the last year's third fiscal quarter.

Same-store sales rose 13.7%.

"Critical business metrics, including traffic, conversion rate and average ticket improved throughout the quarter, yielding strong positive comparable store sales," said Alex Smith, president and CEO. "Excellent input margins and lower markdown activity generated the highest merchandise margins in over six years."

Pier 1 said the bottom line also was aided by a non-cash $55.6 million income tax benefit as a result of recent changes in tax laws. The company said it expects to receive an income tax refund of about $56 million during the fourth quarter.

Even without the income tax benefit and other one-time charges, the company recorded a profit of approximately $2.1 million, Smith said.

Pier 1 has closed 33 stores since the beginning of its fiscal year and said it expects to close seven more in January and February. The company earlier said it would close 50 stores in the current fiscal year, but said it has received rent reductions from a number of its landlords, so additional closings won't be necessary.

The retailer had 1,059 stores in North America as of Nov. 28.

For the first nine months of the fiscal year, sales declined 3.9% to $894.9 million.

Nine-month net income was $52.3 million or 55 cents per share. In the first nine months of the previous fiscal year, the company had a net loss of $99.8 million or $1.12 per share.

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Pier 1 reports $38.8M profit

Dec 21, 2009

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