Pier 1 reports $38.8M profit
By Larry Thomas -- Furniture Today, December 21, 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.
Pier 1 Imports
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 11/28 | 2009 | 2008 | Change |
| (a) Includes gain on retirement of debt of $49.7 million in the 2009 nine months. Also includes income tax benefit of $55.6 million in the 2009 quarter and year, and income tax expense of $188,000 in the 2008 quarter and $637,000 in the 2008 year. |
|||
| Sales | $327,075,000 | $300,906,000 | 8.7% |
| Operating income | 8,240,000 | (27,448,000) | — |
| Net income (a) | 38,813,000 | (36,855,000) | — |
| 9 months ended 11/28 | 2009 | 2008 | Change |
| Earnings per share | 0.37 | (0.41) | — |
| Sales | $894,878,000 | $931,420,000 | (3.9%) |
| Operating income | (21,956,000) | (70,118,000) | — |
| Net income (a) | 52,347,000 | (99,835,000) | — |
| Earnings per share | 0.55 | (1.12) | — |
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