Pier 1 Sales Drop, Boosting Urgency to Accelerate Turnaround
(Bloomberg) -- Pier 1 Imports Inc.’s turnaround efforts are gaining new urgency after its latest quarterly results disappointed investors.
Same-store sales, a key metric for gauging a retailer’s health, fell more than expected at the furniture and home furnishings chain. The shares plunged as much as 22 percent on Thursday -- the most in more than two months.
Under its new road map, Pier 1 is aiming for profitability in three years. Sales are increasingly under pressure from online competitors such as Amazon.com Inc. and Wayfair Inc. and existing brick-and-mortar chains offering lower prices and free shipping. Pier 1 seeks to expand its own e-commerce presence while making supply chain improvements and relying less on discounts to draw shoppers in.
While the chain said it’s making progress, investor skepticism has persisted. The stock, which has lost more than 40 percent of its value in the last year through yesterday’s close, fell to as low as $2.34 on Thursday.
Excluding some items, the company’s loss was 36 cents a share during the quarter, better than analysts’ expectation for a 39-cent loss. Same-store sales fell 8.2 percent, meanwhile, more than the 7.6 percent decline projected by analysts, according to Consensus Metrix. It marked the third consecutive quarter of negative comparable sales.
Pier 1 sees sluggishness persisting in the current quarter, forecasting a same-store sales drop of as much as 7 percent. That measure is expected to turn positive for the full fiscal year, however, as the company brings in new merchandise and revamps its marketing and store formats.
Chief Executive Officer Alasdair James also said prices will be “more accessible,” and the chain will establish a presence on social media platforms such as Pinterest and Instagram.
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