Pier 1 Imports Issues Guidance

November 18, 2008  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on November 2008 Pier 1 Imports, Fort Worth, Texas, issued a third-quarter guidance Monday that indicates same store sales will fall between 16 percent and 18 percent compared with the same period last year.

“The significant slowdown in consumer spending continues to affect our business. The deterioration in customer traffic that we reported for September continued into October, resulting in traffic that was down 10 percent below last year,” said Alex Smith, president and CEO in an announcement of the guidance. “Customers who are visiting our stores continue to respond well and we see meaningful improvements in both conversion rate and units per transaction. These increases are offset by the fact customers primarily shopped for ‘small treats,’ such as Halloween and holiday decor, and smaller home furnishings and furniture purchases, resulting in a lower average ticket.”

Smith went on to say that Pier 1’s merchandise margin rate remains healthy, and the company is optimistic about its inventory position. Pier 1 also will step up marketing activities for the holiday season.

He also said Pier 1’s balance sheet is strong in terms of liquidity, and the company remains focused on matching inventory and purchasing to match consumer demand.

“We are constantly evaluating the working capital needs of our company in this challenging environment,” Smith said. “Based on current trends, we anticipate no need to request cash advances under our credit facility for the foreseeable future.”