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From Home Furnishing Business

Pier 1 Q4 Profits Higher on 2.6% Sales Decline

Pier 1 Imports (NYSE: PIR) said sales slipped 2.6% in the fourth fiscal quarter, but net income shot up more than 42% as the retailer boosted gross margins and controlled operational costs.

Sales for the quarter ended Feb. 25 totaled $528.4 million, down from $542.3 million in the same quarter the previous fiscal year. Pier 1 said company comparable sales were up 0.2% because the home furnishings and décor retailer ended its fiscal year with 14 fewer brick-and-mortar locations than it had in the comparable quarter.

Net income totaled $26.6 million or 33 cents per share. That was up from $18.7 million or 23 cents per share in last year’s fourth fiscal quarter.

The company said gross margin jumped to 39.2% from 36.3% in last year’s fourth quarter, while operating income was up 33%.

“We are pleased to conclude the year with strong fourth quarter results,” said Terry London, interim president and CEO. “We gained momentum in the second half of the year, as our initiatives to drive improved financial performance took hold. Our omni-channel platform is enabling us to compete effectively in a challenging environment and positions us to deliver long-term success and increased shareholder value.”

He said e-commerce sales were up 28% compared to the same period a year ago, and accounted for 19.5% of total sales.

For the fiscal year ended Feb. 25, sales fell 3.4% to $1.83 billion, and company comparable sales were down 1%.

Net income for the year was $30.1 million or 37 cents per share. That was down from $39.6 million or 46 cents per share in the previous fiscal year.

Pier 1 ended the fiscal year with 1,018 retail stores, and said it expects to close a net of 20 to 25 stores in the current year.    

For the current year, the company is projecting a net sales increase of 2% to 3%, and earnings per share of 46 cents to 52 cents. The per-share figures include a projected net loss of 3 cents to 7 cents in the first fiscal quarter.

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