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Monday, March 1, 2021

Pier 1 CFO departs as 4Q results disappoint; Action plan revealed

Pier 1 Imports Inc. (PIR) on Wednesday reported a fiscal fourth-quarter loss of $68.8 million, after reporting a profit in the same period a year earlier.

The Fort Worth-based company said it had a loss of 85 cents per share.

The home decor company posted revenue of $412.5 million in the period.

For the year, the company reported a loss of $198.8 million, or $2.46 per share, swinging to a loss in the period. Revenue was reported as $1.55 billion.

In the final minutes of trading on Wednesday, the company’s shares hit 65 cents. A year ago, they were trading at $3.57.

Amid all the financial news, the company’s chief financial officer, Nancy Walsh, is leaving after a year on the job. She will be replaced by Deborah Rieger, a director of consulting firm AlixPartners, which is working with the home-furnishings retailer. Pier 1 said it is implementing a plan designed to drive benefits in fiscal 2020 of approximately $100-$110 million by resetting its gross margin and cost structure. Approximately one-third of the benefits are expected to be realized in gross margin, with the remaining two-thirds coming from cost reduction. After reinvesting in the business, the company believes it will be positioned to recapture approximately $30-$40 million of net income and $45-$55 million of EBITDA in fiscal year 2020. After closing 30 stores in fiscal 2019, the company is considering closing up to 45 locations in fiscal 2020 as leases expire. Further, Pier 1 has conducted a review of its store portfolio and will be seeking occupancy cost reductions. The store closure number could increase to up to 15% of stores if the company is unable to achieve performance goals, sales targets, and reductions in occupancy and other costs..

“We are pleased to be sharing our fiscal 2020 action plan today, which is designed to reset our operating model and rebuild our business for the future,” said Cheryl Bachelder, interim CEO. “As anticipated, our fourth quarter sales and profitability were disappointing and reflect the execution issues we identified earlier in the year and have been working with urgency to correct. Since December, we assembled a capable leadership team, brought consulting expertise onboard, began a rapid diagnostic process and selected priority initiatives designed to improve our operating model and financial performance. Short term, we exited some legacy inventory, revamped the focus of our spring/summer merchandise and marketing, and implemented an organizational redesign in support of our go-forward plan.”

This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on PIR at https://www.zacks.com/ap/PIR

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