Pier 1 Imports Q4 Profit Falls, Updates 3-year Growth Projection

(RTTNews) - Pier 1 Imports, Inc. (PIR), importer and specialty retailer of decorative home furnishings and gifts, Thursday announced a fall in net profit for the 13-week fourth quarter, hit by extreme weather, compared to the same quarter in the prior year that had an additional week. Net sales were down, while cost of sales was higher from the prior year. The company provided guidance for fiscal 2015 and updated growth projections for the next three year period.

Chief Executive Officer Alex Smith said, "Fiscal 2014 was a transformational year for Pier 1 Imports... we concluded the year with a difficult fourth quarter - due to an unusually high number of snowstorms which impacted approximately two-thirds of our selling days in many of our key markets."

For the fourth quarter, the company recorded net income of $42.6 million or $0.41 per share, compared with $61.7 million or $0.58 per share for the 14-week period last year. On an adjusted basis, net profit, that utilized a 35.6% annual effective tax rate, was $64.2 million or an adjusted $0.60 per share.

On average, 12 analysts polled by Thomson Reuters expected earnings per share of $0.41 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter declined to $515.79 million from $551.6 million last year, while Street consensus was $512.76 million. Cost of sales was higher and the company recorded a lower income tax provision for the quarter.

Comparable-store sales for the 13-week period slid 4.6% compared with the 13-weeks ended February 23, 2013. Adjusting for the shifted calendar in fiscal 2013, 13-week comparable-store sales increased 0.6% from last year.

Looking ahead to the fiscal 2015, the company projects year over year growth of 15 to 23 percent in earnings per share, in a range of $1.16 to $1.24. Comparable-store sales growth is expected in the mid single-digit range. Street is currently looking for earnings of $1.23 per share, on $1.91 billion in revenues for the year.

Pier 1 is now projects three year sales per retail per square foot of $225 and operating margins of around 11% to 11.5%. This compares with the prior expectations for sales per retail square foot of $225 and operating margins of 12% by fiscal 2015 end. Pier 1 Imports said it is on track to achieve e-Commerce sales representing at least 10% of total sales by the end of fiscal 2016.

In addition, the company said its board authorized new share buyback of $200 million common stock on completion of its current authorisation for $200 million buyback. Further, Pier 1 Imports launched a transaction seeking commitments for a $200 million senior secured term loan B facility due in 2021.

In the pre-market hours, PIR is at $18.22, down 0.27 percent.