Pier 1 net income jumps 65.4% in fourth quarter

Rebounding retailer reports first positive operating profit in six years

Jay McIntosh -- Furniture Today, April 7, 2011

FORT WORTH, Texas — Pier 1 Imports rang up a 65.4% increase in net income in its fiscal fourth quarter as sales rose 7.7% with same-store sales climbing 8.9%, the Fort Worth, Texas-based retailer reported.

Pier 1 said it also achieved a positive operating profit in the fiscal year ended Feb. 26 for the first time in six years, with merchandise margins improving to 58.4% of sales from 55.8% the previous fiscal year.

Net income for the latest quarter was $57.1 million or 48 cents per share, compared with $34.5 million or 30 cents per share a year earlier. Sales of $426.6 million were up from $396 million with gains in store traffic, conversion rate and average ticket.

For the full year, the company earned $100.1 million or 85 cents per share, compared with $86.8 million or 86 cents per share the previous year. But the previous year, the company had negative operating income of $3.3 million and benefited from a $49.7 million gain on retirement of debt, and a $54.8 million gain on an income tax refund.

Sales for the latest year were just shy of $1.4 billion, up from $1.29 billion the previous year.

"Our new year is off to a good start and our spring and Easter assortments are resonating with our customers. Although the Easter holiday falls into April this year, March comp store sales increased 11.3% on top of last year's March comp store sales increase of 19.4%," said Alex Smith, president and CEO.

He noted that operating income improved more than $100 million last year, adding, "The journey we started our years ago to return Pier 1 Imports to profitability and beyond has reached its initial destination - profitability - but we are by no means done."

Smith said the company has a new three-year growth plan designed to improve sales, profits and shareholder value.

Pier 1 said it ended the fiscal year with inventory of $311.8 million, down slightly from $313.5 million a year earlier. It had cash and equivalents of $301.5 million, compared with $187.9 million at the end of 2009-2010.