Pier 1 profit up in 2Q
Staff Staff -- Furniture Today, September 17, 2010
Dallas - Pier 1 Imports reported its second-quarter results yesterday, showcasing improved comparable stores sales and a return to profitability.
For the quarter ending Aug. 28, the company reported comparable store sales growth of 11.2 percent versus last year's decline of 7.6 percent and an operating income of $15.2 million compared to an operating loss of $15.3 million last year. Net income for the quarter was $14.4 million or 12 cents per share. The company's merchandise margins were 58.3% of sales compared to 52% of sales last year. In addition, Pier 1's gross profit improved to 36.9% of sales compared to 28.5% last year.
Alex W. Smith, president and ceo said, "Our return to profitability and beyond is firmly on track - we are all extremely upbeat about short and long-term prospects for our company."
Smith noted that the results showed a more "normalized" business with fewer heavy promotions and clearance sales. Smith pointed to an overall reduction of clearance merchandise and better margins on the same goods. He said the company is targeting a goal of $200 per square foot over the next few years.
"We're building our business one sku and one customer at a time," he said. Though admitting the economy is still somewhat soft, Smith expects the company to do well as long as the recovery is slow but continuing.
The company also outlined expanded plans for its digital presence. A "Pier 1 on the Go" website will be launched next year to allow customers to "pre-shop" online, check availability and pay and pick-up items at their local store. This year, the company is increasing its ad presence on sites such as Marthastewart.com and sheknows.com. Finally, Smith noted that it will invest more in social media. Though Pier 1 does have accounts on the major social media sites like Facebook and Twitter, more effort will be made to update them frequently and offer special promotions.
Later this fall, the company plans to promote its efforts for the charity Toys for Tots through Facebook by donating $1 for every new Facebook follower.
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