Pier 1 sales climb 8.3% in 2Q

Jay McIntosh -- Furniture Today, September 17, 2012

FORT WORTH, Texas - An 8.3% sales gains and a sharply improved gross margin led to soaring profits for retailer Pier 1 Imports in the fiscal second quarter ended Aug. 25.
     Sales of $367.6 million were up from $339.6 million a year earlier, the result of increased store traffic and a higher average ticket, the Fort Worth-based company reported.
     Profits of $26.2 million or 24 cents per share were up 57.7% from the same period a year earlier, although part of the gain stemmed from a one-time tax benefit. Excluding that benefit and adjusting for a normal tax rate, earnings would be $20.7 million or 19 cents per share - still up about 24% in dollars and 36% on a per share basis.
     Alex Smith, president and CEO, said this was the company's 12th consecutive quarter of same-store sales gains and profit growth. Same-store sales were up 6.7% from a year ago, on top of a 10.8% gain a year earlier. Compared with three years ago, same store sales have grown 28.7%, the company said.
     "Our sound strategies and focus on flawless execution ideally position the company to achieve continued growth and long-term success. Now, with the recent launch of the new e-commerce enabled Pier1.com, we have two powerful growth vehicles - our enhanced portfolio of 1,058 Pier 1 Imports stores and our new online business," Smith said.
     Gross profit was 41.2% of sales for the quarter, up 1.6 percentage points from a year earlier.
     For the first half of the fiscal year, sales of $728.7 million were up 8.1% from the same period last year, with a 7% gain in same-store sales.
     Net income of $44.1 million or 40 cents per share was up 43.3%. Adjusted to exclude the tax benefit, earnings would have been $30.7 million or 26 cents per share, a gain of about 26%.
     The company also raised its profit forecast, saying it now expects earnings per share of $1.15 to $1.21 for the year, or adjusted earnings of $1.10 to $1.16 per share on a 52-week basis. That is up from the prior guidance of $1.08 to $1.14 on an adjusted basis.