Pier 1 Net Slides for Q4, FY
April 10, 2014,
FORT WORTH, Texas-A weak fourth-quarter performance led to significant cuts in Pier 1 Imports' bottom line for both the quarter and the fiscal year.
Net income in the quarter fell 31 percent to $42.6 million, bringing net income for the fiscal year ending on March 1 to $107.5 million, down 16.9 percent. Net sales in the quarter were off 6.5 percent to $515.8 million, including a 4.6 percent shortfall in same-store sales. This brought net sales for the year to $1.8 billion, up 3.9 percent from the prior fiscal year and including a same-store sales gain of 2.4 percent.
Alex Smith, Pier 1's president and CEO, noted that the high number of snow storms during the "difficult" fourth quarter affected about two-thirds of the selling days in many of the retailer's key markets. Smith described the fiscal year ending on March 1 as "a transformational year" for the company. Highlights for the year included the rebranding and relaunching of Pier 1's Express Request special-order program, the upgrading of its information technology and systems to support its 1 Pier 1 initiative, the opening of 27 new stores and the rolling out of its in-home delivery program.
Smith said e-commerce accounted for 4 percent of Pier 1's total sales last year, putting the retailer on target to achieve a 10 percent share of its sales by fiscal 2016. "We are working hard to improve the Pier 1 Imports brand experience in every way, strengthening our store portfolio with new and relocated stores and continually enhancing our ability to provide customers with a seamless shopping experience," he said.
Gross margin in the quarter dropped 360 basis points to 41.6 percent. Selling, general and administrative expenses were cut by 8 percent in dollars and 40 basis points as a percentage of sales, to 26 percent.
"We are highly confident that we have the right plans, infrastructure and talent to drive sales, improve profitability and capture market share in our new fiscal year," Smith said. "We are in the best shape strategically we have ever been, and we are excited to see new and existing customers respond so positively to 1 Pier 1, which provides them with more product choices and makes their shopping easier and more enjoyable."