Pier 1 sales decline 13% in 1Q
By Larry Thomas -- Furniture Today, June 22, 2008
FORT WORTH, Texas — Specialty retailer Pier 1 Imports reported a net loss of $32.8 million for the fiscal first quarter ended May 31, but said merchandise margins improved significantly as the company reduced inventories and closed unprofitable stores.
The loss, which equals 37 cents per share, is smaller than the loss in the same quarter last year, when Pier 1 lost $56.4 million or 64 cents per share.
Sales in the most recent quarter fell 13% to $310 million and same-store sales fell 5.4%.
Alex Smith, president and CEO, said the sales decline was not a surprise because the company has closed about 80 stores in the past year.
The same-store sales decline, he said, was due largely to an aggressive promotion in March and April of 2007 to liquidate discontinued merchandise. He said same-store sales were up 7.5% in May and that merchandise margins improved significantly.
“We expect to see continued growth in our merchandise margin rate throughout the rest of the year,” Smith said. “Our significantly increased conversion rates prove that consumers continue to respond favorably to our improved assortments and the enhanced in-store shopping experience.”
Merchandise margins in the most recent quarter were 51.3% compared with 45.5% in the same quarter last year.
Smith said the company expects same-store sales will be “slightly negative to modestly positive” for the second fiscal quarter, which began June 1. For the full year, same-store sales are projected to be flat to slightly positive, he said.
The company did not provide sales and earnings projections.
| Pier 1 Imports | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 5/31 | 2008 | 2007 | Change |
| Sales | $310,020,000 | $356,375,000 | (13.0%) |
| Operating income | (21,762,000) | (44,946,000) | — |
| Net income | (32,824,000) | (56,378,000) | — |
| Earnings per share | (0.37) | (0.64) | — |
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