FORT WORTH, Texas — Pier 1 Imports reported lower profits for its fiscal fourth quarter on declining sales, but the results were better than earlier projected and executives said they’re making progress on turning the business around.
The Fort Worth-based home furnishings retailer said net income for the three months ended Feb. 27 was $18.7 million, or 23 cents a share, off from $33.1 million, or 37 cents a share, a year ago. Sales fell 1.4 percent to $542.3 million, and same-store sales were off 0.6 percent.
Still, that was better than the earnings range of 18 to 22 cents a share projected by the company in March. For fiscal 2017, the company expects earnings in a range of 42 to 50 cents a share with sales growth essentially flat.
“Our outlook for fiscal 2017 assumes some top- and bottom-line pressure during the first half, with sales and earnings gaining momentum in the third and fourth quarters,” said Jeffrey N. Boyer, Executive Vice President and Chief Financial Officer, in a statement.
The earnings were released after the close of trading on Wall Street. Pier 1 shares, which gained more than 5 percent on Wednesday in anticipation of the release, gave it back in after hours trading, dropping 39 cents to $6.95 a share.
For the full year, net income totaled $39.6 million, down 47 percent from fiscal 2015, and sales increased less than 1 percent to $1.89 billion.
Alex W. Smith, Pier 1’s president and CEO, called fiscal 2016 “a challenging year” but said the company had “made solid progress toward stabilizing top line trends, cutting costs and reducing inventory levels.”
“We entered fiscal 2017 with much improved distribution center operations,” Smith said. “The significant strides we made on the inventory front helped us put many of the issues in our distribution centers behind us; we’re now starting to see improved efficiency across the network, which will help us strengthen merchandise margin.”
Smith also cited continued gains in e-commerce sales, which increased by 45 percent for the year to reach 16 percent of total sales.
The growth online has resulted in Pier 1 slowly shrinking its brick-and-mortar presence. As a result of what the company called its “real estate optimization initiative,” Pier 1 closed 24 stores and opened one in the fourth quarter, ending the fiscal year with 33 net closures and 1,032 stores. It expects about 20 store closures in fiscal 2017.
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