Pier 1 3Q Sales Rise 8.8%

December 16, 2009  by in UnCategorized   

By Home Furnishings Business in on December 17, 2009

Pier 1 Imports (PIR), Fort Worth, Texas, is in black for the third quarter of 2009, reporting on Thursday net income of $39 million on sales of $327.1 million, with comparable-store sales increasing 13.7 percent.

Third quarter 2009 results include the effect of recording a $56 million tax benefit as a result of recent changes in tax laws increasing the net operating loss carry-back period from two to five years. It is anticipated that the related tax refund will be received during the fourth quarter of fiscal 2010, and may be subject to future adjustment by the Internal Revenue Service.

In third-quarter 2008, Pier 1 had $301 million in sales and lost $35 million.

Year to date, Pier 1 reported net income of $52 million versus a net loss of $100 million for the same period last year. Total sales for the first nine months of 2009 declined to $895 million from $931 million in the year-ago period. Comparable store sales for the first nine months declined 0.6%.

"The results of this past quarter were very gratifying for all of us at Pier 1 Imports," said President and CEO Alex W. Smith. "Critical business metrics including traffic, conversion rate and average ticket improved throughout the quarter yielding strong positive comparable store sales. Excellent input margins and lower markdown activity generated the highest merchandise margins in over six years.

"As we move toward the conclusion of our holiday selling season and the remainder of our fiscal year, we expect to continue to generate positive comparable store sales and year-over-year improvements in merchandise margin. Supported by a multi-faceted marketing campaign, our sales growth has continued into December and our Christmas merchandise is selling well. Reduced markdown inventory levels and stronger pre-Christmas sell-through will put some pressure on our sales comparisons in January but will positively impact merchandise margin."

Smith added that Pier 1 now plans to close fewer stores, 40 versus the 50 previously reported, during the fourth quarter due to rental reductions that will save around $10 million on a cash basis in fiscal 2010. Year to date, the company has closed 33 locations and expects to close 7 locations during January and February. Pier 1 ended the quarter with 1,059 Pier 1 Imports stores in North America.