FORT WORTH, Texas (AP) — Pier 1 Imports’ fiscal second-quarter profit dropped 32 percent, missing expectations and sending its shares sharply lower in premarket trading Thursday. The Fort Worth, Texas company cut its fiscal 2014 earnings forecast.
President and CEO Alex Smith said in a statement on Thursday that the company’s marketing efforts failed to deliver the right message about clearance and promotions in its stores. He said Pier 1 could have done a better job getting new products to stores and displayed them better.
Its shares fell $2.39, or 10.1 percent, to $21.21 in trading 2 ½ hours before the market opening. Its shares peaked for the past year at $25.29 in mid-May.
For the three months ended Aug. 31, Pier 1 Imports Inc. earned $17.8 million, or 17 cents per share. That’s down from $26.2 million, or 24 cents per share, a year earlier. The year-ago period’s results were helped by an interest expense adjustment and income tax provision-related item.
Analysts polled by FactSet expected higher earnings of 21 cents per share for the latest quarter.
Revenue increased 8 percent to $395.6 million from $367.6 million, but missed Wall Street’s estimate of $404.2 million.
Revenue at stores open at least a year, a key indicator of a retailer’s health, rose 3.5 percent. This metric excludes the potentially distorting effect of results from stores recently opened or closed. This quarter’s growth was slower than the 6.7 percent increase in the prior-year period.
Pier 1 now foresees fiscal 2014 earnings of $1.23 to $1.29 per share, down from its previous outlook of $1.27 to $1.32 per share. It predicts revenue will be up by a high single-digit percentage rate.
Analysts expect full-year earnings of $1.31 per share.
Pier 1 plans to return to advertising on network television during the critical holiday season. The period is important because it can make up to as much as 40 percent of a retailers’ total annual revenue.