Pier 1 Imports, Inc. Reports Higher Sales
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Pier 1 Imports, Inc. reported financial results for the 13-week and 39-week periods ended November 30, 2013.
Third Quarter Fiscal 2014 Financial Highlights
- Total sales increased 9.6% versus last year’s increase of 10.9%
- Comparable store sales increased 6.9% versus last year’s increase of 7.9%; three-year cumulative comparable store sales increase of 21.8%
- Gross profit of 43.4% of sales
- Third quarter EBITDA increased 13.3% to $53.4 million
- Earnings per share increased to $0.26 (GAAP) versus $0.22 (GAAP) and $0.25 (non-GAAP) for the same period in fiscal 2013 (see reconciliation of earnings per share to non-GAAP adjusted earnings per share below under Financial Disclosure Advisory)
“We’re pleased to deliver solid third quarter financial results,” stated Alex W. Smith, President and Chief Executive Officer. “Our unique and special merchandise assortments created a well-positioned value offer that resonated with our customers. Our more overtly promotional marketing stance drove strong traffic, and our store and e-commerce teams delivered on conversion. In fact, this year marked a new, all-time sales record for both Black Friday and the full post-Thanksgiving weekend.”
“We are delighted with the progress we have made with 1 Pier 1 – our omni-channel strategy. Pier1.com continues to outperform our expectations, representing over 4% of total sales in the third quarter, and reflecting increases in both traffic and conversion. In addition, our re-launched and re-branded Express Request program has been a resounding success with our customers and we anticipate this will remain an important growth driver going forward.”
“We feel very good about our positioning and the execution of our holiday plans. Our holiday assortments have been very well received, as have our merchandising, marketing and customer engagement activities. We fully expect to capture additional market share over the holiday period.”
Mr. Smith concluded, “Our Board of Directors and management greatly appreciate the support of Pier 1 Imports’ shareholders and remain committed to returning value to them. During the third quarter we announced a new $200 million share repurchase program, reflecting our confidence in the underlying strength of the business and the significant potential ahead of us. Additionally, we have increased our quarterly cash dividend by 20% to $0.06 per share.”
Third Quarter Fiscal 2014 Results
For the third quarter ended November 30, 2013, the Company reported net income of $26.8 million, or $0.26 per share, compared to $23.7 million, or $0.22 per share a year ago. Adjusted net income (non-GAAP) for the third quarter of last year, as described below under Financial Disclosure Advisory, was $27.1 million, and adjusted earnings per share were $0.25. Total sales for the third quarter were $465.5 million, a 9.6% increase versus $424.5 million in the year-ago quarter. Comparable store sales increased 6.9% compared to last year’s comparable store sales gain of 7.9%. Comparable store sales results for the period were primarily attributable to increases in conversion rate and higher average ticket.
Gross profit for the quarter increased to $202.2 million versus $186.3 million in the third quarter of last year. As a percentage of sales, gross profit was 43.4% compared to 43.9% in the third quarter of fiscal 2013 and primarily reflects a slightly increased promotional cadence versus a year ago.
Third quarter selling, general and administrative expenses were $149.2 million, or 32.1% of sales, compared to $139.2 million, or 32.8% of sales, in the third quarter of last year. The 70 basis point improvement was primarily due to the leveraging of store salaries and marketing expense.
Third quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) increased 13.3% to $53.4 million, versus $47.2 million in the same period last year. Depreciation and amortization was $9.9 million, compared to $8.2 million in the third quarter of last year.
Operating income for the third quarter increased 11% to $43.1 million, or 9.3% of sales, compared to $38.8 million, or 9.1% of sales, last year.
For the 39-week period ended November 30, 2013, the Company reported net income of $64.9 million, or $0.61 per share, compared to $67.7 million, or $0.62 per share, in the same period last year. The Company’s adjusted net income (non-GAAP) for the 39-weeks ended November 24, 2012, as described below under Financial Disclosure Advisory, was $65.7 million, and adjusted earnings per share were $0.60. Total sales for the 39-week period ended November 30, 2013 increased 8.9% to $1.256 billion compared to $1.153 billion in the year-ago period. Comparable store sales for the 39-week period increased 5.5% versus a comparable store sales increase of 7.3% for the 39-week period ended November 24, 2012.
Gross profit for the 39-week period ended November 30, 2013 increased to $531.1 million, or 42.3% of sales, from $488.1 million, or 42.3% of sales in the same period last year.
Fiscal 2014 year-to-date selling, general and administrative expenses were $397.3 million, or 31.6% of sales, compared to $367.6 million, or 31.9% of sales, in the same period last year.
EBITDA increased 10.1% to $134.5 million for the 39-weeks ended November 30, 2013 versus $122.1 million for the same period last year.
Depreciation and amortization for the 39-weeks ended November 30, 2013 was $28.5 million, or 2.3% of sales, versus $21.9 million, or 1.9% of sales in the year ago period. The increase is attributable to the Company’s ongoing investments in both its stores and e-commerce business, including the completed installation of the Company’s new point-of-sale system in the second quarter of fiscal 2014.
Operating income for the 39-weeks ended November 30, 2013 was $105.4 million, or 8.4% of sales, compared to $98.5 million, or 8.5% of sales for the same period in fiscal 2013.
Pier 1 Imports, Inc.
is the original global importer of imported decorative home furnishings and gifts. Information about the Company is available on www.pier1.com