Pier 1 sales up 3.1% in fiscal first quarter, but earnings tumble

Pier 1 Imports said sales rose 3.1% in its fiscal first quarter, but profits tumbled more than 50% as the retailer incurred higher costs as it beefed up its distribution network to support e-commerce sales.

Net income for the quarter ended May 30 totaled $6.87 million or 8 cents per share, down from $15.1 million or 16 cents per share in the same quarter last year.

The retailer said gross margin fell to 38.1% of sales from 40% of sales, while selling, general and administrative expenses rose to 32.1% of sales from $31.4% of sales in last year’s first quarter.

Net sales totaled $432 million, up from $419.1 million in the same quarter last year. The company said e-commerce sales accounted for 17% of the total.

“E-commerce continues to perform exceptionally well, generating strong improvement across all performance metrics,” said Alex Smith, president and CEO. “With our omni-channel transformation now complete, we are confident that we can begin to rebuild our profitability levels through measured sales and margin growth, along with expense leverage.”

Smith said company comparable sales rose 2% for the quarter, but were up 4% in May, the final month of the reporting period.

“Now that we are into June and at the leading edge of our summer clearance event, company comparable sales are trending in excess of May,” he added.

Pier 1 didn’t make didn’t make a sales projection for the fiscal year, but reaffirmed an April

earnings forecast of 83 cents to 87 cents per share. In its most recent fiscal year, which ended Feb. 28, earnings were 82 cents per share.

Company comparable sales growth is projected at 3% to 5% for the year. The April forecast said the increase would be in the mid-single digits.

Source: Furniture Today