Profit plunges 40 percent at Pier 1, hurt by slow sales, discounting

Tuesday, December 14th 2004, 10:39 am
By: News On 6

FORT WORTH, Texas (Dow Jones/AP) _ Pier 1 Imports Inc. posted a 40 percent dive in profit for its latest quarter, as slow store traffic and deep merchandise discounting hurt the home-furnishings retailer's bottom line.

The Fort Worth-based company on Tuesday also lowered its earnings outlook for the next quarter and full fiscal year.

For the fiscal third quarter ended Nov. 27, Pier 1 reported net income of $19.5 million, or 22 cents a share, compared with $32.2 million, or 35 cents a share, in the same quarter a year earlier.

Sales for the quarter rose 1.1 percent to $487.7 million from $482.4 million.

Sales at stores open at least a year _ also known as same-store sales _ fell 6.3 percent.

Earlier this month, chairman and chief executive Marvin J. Girouard warned that sales for the first three weeks of November were disappointing due to a lack of marketing support from television and newspaper inserts.

He also said sales for the third quarter were below the company's plan, and projected earnings for the quarter of 21 cents to 23 cents a share _ below the company's early November estimate of 24 cents to 29 cents a share.

Analysts surveyed by Thomson First Call were looking for the company to post earnings of 22 cents per share on sales of $490.5 million in the latest quarter.

Same-store sales for December are declining in the mid-single-digit percentages, the company said Tuesday.

Pier 1 estimated comparable-store sales for the month will be down 2 percent to 6 percent and in the negative mid-single-digit percentages for the fiscal fourth quarter ending Feb. 26.

For the fourth quarter, Pier 1 projects earnings of 43 cents to 52 cents a share, compared with 53 cents a share in the fiscal fourth quarter ended Feb. 28, 2004,

For all of fiscal 2004, it sees earnings of 90 cents to 99 cents a share, down from the $1.29 a share in fiscal 2003.

The new projections are below the company's mid-September estimate for earnings of 52 cents to 62 cents a share for the fourth quarter and $1.05 to $1.22 a share for the year.

Analysts are expecting fourth-quarter earnings of 52 cents per share, on average, with full-year earnings of 98 cents.

Pier 1 had revenue of $1.87 billion for the year ended Feb. 28.