Pier 1 reports profitable 1Q


A. Lee Graham Reporter

Pier 1 Imports Inc. of Fort Worth has reported a profitable first quarter, with total sales increasing 9.3 percent, comparable store sales rising 5.9 percent and gross profit as a percentage of sales up 80 basis points to 42.4 percent. “The continued improvement of our gross profit speaks to the success of our merchandising strategies, both in-store and online, and reflects strong full-price selling during the period,” said president and CEO Alex W. Smith, commenting in a news release. “We also leveraged expenses, enabling us to deliver operating margins of 8.4 percent and earnings per share growth of 19 percent,” Smith said. Net income for the quarter ended June 1, 2013 rose 14 percent to $20.3 million, with earnings per share up 19 percent to 19 cents., compared to last year’s first quarter net income of $17.8 million, or 16 cents per share. “We’re pleased with the ongoing progress we are making towards building out our multi-channel functionality and executing our ‘1 Pier 1’ vision,” said Smith, adding that the company’s new point-of-sale system is expected to reach completion later this summer. “We will then begin the integration of our stores and e-commerce businesses, laying the foundation to provide a seamless and significantly enhanced shopping experience for our customers,” Smith said. For the first quarter ended June 1, 2013, sales totaled $394.9 million, a 9.3 percent increase compared to $361.1 million in the same quarter last year. Comparable-store sales rose 5.9 percent in the first quarter compared to last year’s comparable-store sales gain of 7.2 percent. The company credited increases in store traffic and higher average ticket expenditures for those results. Gross profit for the quarter reached $167.6 million, or 42.4 percent of sales, from $150.3 million, or 41.6 percent of sales in the same period last year. Operating income for the first quarter increased 21.2 percent to $33.2 million, or 8.4 percent of sales, compared to $27.4 million, or 7.6 percent of sales, last year. As of June 1, 2013, the company described itself as in “strong financial condition” with $241.9 million of cash and cash equivalents. Inventory totaled $383.3 million, an increase of 14.9 percent compared to $333.5 million a year ago, which the company said was in line with its expectations. Capital expenditures totaled $14.1 million for the quarter and were primarily used for new store openings, existing store improvements, and infrastructure and technology development. Meanwhile, the company has provided updated financial guidance for fiscal 2014. It expects earnings before interest, taxes, depreciation and amortization to grow in the range of 15 percent to 18 percent, depreciation and amortization to total about $38 million compared to $31 million in fiscal 2013 and earnings per share in the range of $1.27 to $1.32, representing year-over-year growth of 9 percent to 13 percent. Capital expenditures are expected to total about $75 million, with about 30 store openings and 14 closings or relocations expected to yield a net increase of 16 stores for the year. More information is available at www.pier1.com