Pier 1 to close up to 25 stores in the coming years
Pier 1 Imports, Inc. on Wednesday reported fourth quarter net sales fell 2.6% and its average number of stores declined some 3%. Same-store sales rose 0.2% and e-commerce rose 28% compared to the same period a year ago. Earnings (GAAP) were 33 cents per share; adjusted earnings (non-GAAP) were 34 cents per share.
For the full year, net sales decreased 3.4%, as the average number of stores declined approximately 3%. Same-store sales decreased 1%. The retailer achieved e-commerce sales penetration of approximately 20%. Earnings were 37 cents per share and adjusted earnings 44 cents per share.
The company said it expects to close between 20 and 25 stores in the “next couple of years.”
On a conference call with analysts Wednesday, CFO Jeffrey Boyer said the same-store sales improvements the company saw late last year should continue this year, thanks to a boost to its marketing efforts, loyalty program and in-store events. “[T]hat’s helped in the in-store traffic and in-store sales,” he said, according to a transcript from Seeking Alpha. “Our online sales will probably be similar growth rate overall to we saw this year, which is about a 20% increase. So to model about a 20% increase on online that … should get you there.”
The company will spend most of the year with a new CEO, former Kmart chief Alasdair James, who arrives May 1 and will also join the board of directors. James had been president and chief member officer of Sears' Kmart unit since 2014, but left in March, becoming the third high-profile Sears Holdings executive to depart within the last three months.
Pier 1, which has struggled in recent quarters, has been able to rein in costs by close to $5 million year over year, though increased marketing expenses of more than $1 million and costs related to its CEO changeover offset that, Boyer said. Its television ads helped drive traffic to stores, he added, and the company is still working to improve its merchandising.
“We’re dedicating greater resources to strategic categories, where we see the potential to drive sales at a higher growth rate than other merchandise areas,” Boyer said. “We’re also focusing on our top selling collections, which allow us to realize efficiencies in marketing and inventory management and capitalize on expansion opportunities. We’re continuing to emphasize newness across all categories, including our recent addition of select Magnolia Home Product categories and our implementation of a drop ship program.”
Investments in technology, he said, mean that “better analytics” have driven “decision-making and product selection, pricing, promotions, planning and allocations."
- press release via BusinessWire Pier 1 Imports, Inc. Reports Fourth Quarter and Full-Year Fiscal 2017 Financial Results
- Seeking Alpha Earnings Call Transcript Pier 1 Imports' CEO Terry London on Q4 2017 Results
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