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Pier 1 Imports holiday sales disappoint

Weather cited as sales rise just 1.3%

FORT WORTH, Texas — Pier 1 Imports blamed wintry weather for disappointing holiday sales, but said its online business remained strong and that the retailer made the most of the in-store traffic from consumers who braved the weather.

Same-store sale for a five-week period ended Jan. 4 increased 1.3% compared with a five-week period ended Jan. 5 last year.

The company said the inclusion of a 53rd week in its previous fiscal year shifted the fiscal 2014 calendar back by one week, which distorted holiday comparisons. For that reason it presented same-store sales for a five-week period ending the first Saturday in January for each year.

Before that adjustment, same-store sales for December in fiscal year 2014 decreased 5.7%, which compared with an 8.2% increase for a five-week period ended Dec. 29, 2012, over the previous year.

"We're extremely disappointed that December sales results came in well below our expectations, especially considering our holiday selling season kicked off with a record post-Thanksgiving weekend," Pier 1 President and CEO Alex Smith said in a release. "The disruption caused by wintry weather in the first half of December ... continued to impact us throughout the balance of the month and into January."

Smith added that the retailer's "holiday assortments were excellent and our execution both in-store and online was first class - making it all the more upsetting to have our results impacted by forces beyond our control."

Promotional pricing and customer engagement drove increased conversion rates and average tickets during the period, he said, adding that Pier 1 saw particular strength in its Southeast, Southwest and California stores, where calendar-adjusted comps were in the mid-single digits.

E-commerce sales continued to outperform expectations, he said. They were up about 4% in December and were substantially higher in weather-impacted areas.

"Once again we reached new monthly highs in terms of both traffic and conversion through Pier1.com, with the site averaging 2.2 million visitors per week in December," he said.

The company's fiscal 2014 fourth quarter and fiscal year has one less week than the previous fiscal year, but based on a comparable 13 weeks, it said same-store sales are now expected to be flat, and earnings-per-share guidance was adjusted to a range of 47 cents to 52 cents from prior guidance of 60 cents to 66 cents.

For the year, Pier 1 offered guidance of earnings per share in the range of $1.07 to $1.12, compared to prior guidance of $1.21 to $1.27.

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