Pier 1 sees Q3 comp fall, loss up to $20 million
Jeff Linville -- Furniture Today, November 18, 2008
Fort Worth, Texas – Home furnishings specialty retailer Pier 1 Imports yesterday gave advance, and mainly negative, guidance on its third-quarter sales and operating profit.
The 1,100-unit retailer said in a statement that it anticipates a comparable-store drop of 16% to 18% for the quarter ending Nov. 29.
“Merchandise margins are expected to be approximately 52.5%,” the company said, referring to a measure less often used by retailers than average gross margin. “EBITDA before special charges is currently forecasted to be negative $16 - $20 million.”
President and ceo Alex Smith offered some detail, noting that while store traffic was down 10% year-to-year in October, “Customers who are visiting our stores continue to respond well and we see meaningful improvements in both conversion rate and units per transaction. These increases are offset by the fact customers primarily shopped for 'small treats,' such as Halloween and holiday decor, and smaller home furnishings and furniture purchases, resulting in a lower average ticket.”
Pier 1 issued the guidance at this time to coincide with an analyst and shareholder store tour. The company will report third-quarter results on Dec. 18.
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