From Home Furnishing Business
Post-Election Sales Rebound Helps Bottom Line at Pier 1
Despite a slight dip in sales, retailer Pier 1 Imports (NYSE: PIR) said net income jumped more than 24% in the third fiscal quarter to $13.6 million or 17 cents per share.
Sales in the quarter ended Nov. 26 totaled $475.9 million, down 0.4% from $478 million in the same quarter last year. But the company said sales improved noticeably following the Nov. 8 election, and comparable brand sales were up 1.8%.
The retailer said e-commerce sales were up 28% to $97.4 million, which was about 20% of total sales.
“Sales trends rebounded in the second half of November, following the election, which enabled us to deliver third quarter results well ahead of our forecast,” said Alex Smith, president and CEO. “Specifically, we had positive company comparable sales and higher than planned profits in the third quarter. We are making progress on our strategies to deliver shareholder value through our merchandising, marketing, supply chain and real estate initiatives.”
Smith said the company’s seasonal merchandise is “resonating with customers and we’re seeing strength across nearly all our product categories.”
Smith announced earlier this year that he is resigning as of Dec. 31, and the Pier 1 board of directors this week named board Chairman Terry London as interim president and CEO.
London, who has been chairman since June 2012 and a board member since 2003, will keep the additional duties until a permanent replacement is named. The company has retained the search firm Korn Ferry to help find a new CEO.
“I am looking forward to working with our talented executive team and dedicated associates during this interim period,” London said. “We are pleased with our performance thus far in the holiday season and remain focused on the merchandising, marketing and customer engagement initiatives that helped drive our strong third quarter financial results.”
The latest results included an increase in gross margin to 41.3% from 38.5%, which the company attributed to a more cost-efficient promotional strategy and improved operations at its distribution centers.
For the nine months ended Nov. 26, sales totaled $1.3 billion, down from $1.35 billion in the first nine months of the previous fiscal year.
Nine-month net income was $3.49 million or 4 cents per share. That was down from $21 million or 24 cents per share in the comparable period.
As a result of a stronger-than-expected third quarter, the company boosted its sales and earnings projections for the fiscal year.
It is now projecting a sales decline of 2% to 4% -- better than the 4% to 6% decline projected in September. And it’s now projecting earnings per share of 30 cents to 34 cents – well above the September forecast of 16 cents to 24 cents.