Thursday, September 23, 2021
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Pier 1 posts loss, lowers guidance

🕐 2 min read

Pier 1 Imports Inc. (PIR) on Wednesday reported a fiscal second-quarter loss of $4.1 million, after reporting a profit in the same period a year earlier.

The Fort Worth-based company said it had a loss of 5 cents per share.

The results matched Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was also for a loss of 5 cents per share.

The home decor company posted revenue of $405.8 million in the period, missing Street forecasts. Seven analysts surveyed by Zacks expected $408.9 million.

For the current quarter ending in December, Pier 1 expects its per-share earnings to range from 9 cents to 15 cents.

The company expects full-year earnings in the range of 24 cents to 32 cents per share.

“Our top-line results reflect soft store traffic levels throughout the second quarter, most notably in July,” said Alex W. Smith, president and CEO in a statement. “To drive our business, we have many initiatives currently underway which include: our return to television advertising; merchandise refreshes, including the arrival of new and fall seasonal goods; new floor sets; gift registry introduction; full implementation of our multi-tender loyalty program; and an effective and balanced promotional plan.”

Smith said the company saw an improvement in sales and merchandise margin trends through August and into September, but that the company remains cautious in terms of a sales outlook.

Smith and the company announced in September that the CEO, who has been with the company for about 10 years, will step down at the end of the year.

Earlier this week, the company announced it was adopting a shareholders’ agreement aimed at stopping unwanted takeovers.

Hedge fund Alden Global Capital LLC last week announced it had taken a 9.5 percent stake in the retailer, shortly after the retailer announced CEO Alex Smith was leaving the company following disappointing sales.

Fort Worth-based Pier 1 Imports Inc. saw shares rise late on Tuesday after the home-furnishing retailer announced its board of directors adopted

“The board feels it is important to ensure that all shareholders have the opportunity to realize the long-term value of the iconic Pier 1 Imports brand, and to guard against coercive or unfair tactics to gain control of the company without paying all shareholders an appropriate premium,” said Terry E. London, chairman of Pier 1’s board of directors. “Equally important, the board remains focused on our search for a new CEO to guide and execute the company’s omni-channel strategy, and is committed to driving increased value for our shareholders.”

Alden Global released a statement saying it was “severely disappointed that Pier 1 has resorted to this highly questionable form of entrenchment rather than engage constructively with one of its largest shareholders.”

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