Shares of Pier 1 Imports fell to $12.78 in early morning trading after the Fort Worth-based home décor retailer cut its outlook for the year and reported lower-than-expected second quarter results. Net income in the quarter that ended Aug. 30 fell 49 percent to $9.2 million, or 10 cents a share. The company reported revenue of $418.6 million in the period, which was also below forecasts. Aalysts expected $427.3 million, according to Zacks.
“While total brand traffic, conversion and average ticket all increased in the second quarter, we were challenged by soft store traffic and, more significantly, by declines in our merchandise margins,” said Alex Smith, CEO in a news release. “Consequently, results for the second quarter came in below our expectations. Returning our base merchandise margins toward their previous levels is a top priority, and we’re confident that it can be done through a careful balance of full and promotional pricing, as well as improvements to the initial margin.” Pier 1 Imports cut its full-year earnings outlook to a range of 95 cents to $1.05 per share. It had previously said it was looking for earnings between $1.14 and $1.22 per share.