Pier 1 names interim CEO; reports solid 3Q financials

A Pier 1 Imports sign in San Francisco. The retailer cut its fourth-quarter forecast after December sales trailed its expectations. 

Home furnishing retailer Pier 1 Imports Inc. on Wednesday announced it has named current Board Chairman Terry E. London to the position of interim president and CEO.

The company made the announcement at the same time it announced solid  third quarter earnings that seemed to please Wall Street.

In the announcement, Pier 1 announced that its Board of Directors has appointed. London as interim president and CEO effective Jan.1, 2017, in conjunction with the planned departure of Alex W. Smith, Pier 1 Imports’ current president and CEO on Dec. 31, 2016.

“I am pleased to step in as Interim CEO as we continue to collaborate with Korn Ferry on our search for a new chief executive officer,” said London. “The board has worked diligently to identify exemplary candidates who share our commitment to delivering long-term shareholder value. Notably, the next leader of Pier 1 Imports will be just the fifth CEO in the company’s nearly 55-year history.”

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London has served as the non-executive chairman of the Board of Directors of Pier 1 Imports since June of 2012 and has been a director since 2003. Until July of 2015 he served as chairman of the board of London Broadcasting Co. Inc. which he founded in 2007 to identify and acquire media and entertainment companies. London is also a member of the board of Johnson Outdoors Inc. He was previously president and CEO of Gaylord Entertainment Co., a diversified media and entertainment company, and a member of the Board of Directors of Bass Pro Shops Inc. He began his career with KPMG and is a Certified Public Accountant.

Pier 1 Imports (PIR) also on Wednesday reported fiscal third-quarter net income of $13.6 million.

On a per-share basis, the Fort Worth-based company said it had net income of 17 cents. Earnings, adjusted for non-recurring costs, came to 22 cents per share.

“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 Smith in a news release. “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. Our seasonal assortments are resonating with customers and we’re seeing strength across nearly all our product categories. As always, we’re pleased with how our teams and associates are executing against our holiday plans.”

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Smith said the company’s management has confidence in the current brand positioning and long-term financial outlook.

“Pier 1 Imports has always been known for inspirational merchandise, great value and outstanding customer service.” He said. “Layering our omni-channel capabilities on top of that foundation makes Pier 1 Imports a formidable force in the home furnishings space. Our teams are focused on continually enhancing our business model to ensure that we thrive in today’s era of retailing and well into the future.”

The results exceeded Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 12 cents per share.

The home decor company posted revenue of $475.9 million in the period, also exceeding Street forecasts. Seven analysts surveyed by Zacks expected $467.6 million.

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For the current quarter ending in February, Pier 1 expects its per-share earnings to range from 28 cents to 32 cents.

The company expects full-year earnings in the range of 37 cents to 41 cents per share.

For its fiscal third quarter, Pier 1 reported comparable-store sales rose 1.8 percnet, while net sales decreased 0.4 percent. ;

Pier 1 shares have increased 27 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $6.48, a rise of 14 percent in the last 12 months. – This report contains information from the Associated Press.