Pier 1 Imports Inc. reported higher revenues in its second quarter released on Thursday, but higher costs of sales ate up the company’s profit.
The Fort Worth-based home furnishings retailer reported sales of $429.9 million for its fiscal 2016 second quarter, up from $418.6 million last year, but short of analyst expectations. Net income totaled $3.2 million, far less than the year earlier $9.2 million.
The disappointing results hit the company’s stock which fell to $8.68 at the end of the day Thursday, down slightly from the previous day’s close.
For the year, the company expects to earn between 56 cents and 64 cents per share.
“We are disappointed with our second quarter sales and earnings results,” said Alex W. Smith, president and CEO. “Top line growth was below our expectations, with Company comparable sales up 3.8 percent on a constant currency basis. During the period, our margins were impacted by increased promotional and clearance activity, as well as inventory related issues within our distribution center network. We’ve made progress toward bringing inventories in line and remain on track to end fiscal 2016 with year-over-year levels down meaningfully. However, operating with elevated inventories has been a challenge. As such, and considering our second quarter sales trend, we are tempering our expectations for the balance of the year.”