Pier 1 Plunges Again After Quarterly Report Worse Than Anticipated

(Bloomberg) -- Pier 1 Imports Inc. shares tumbled on Thursday after the home-goods retailer’s latest quarterly report -- despite the company’s earlier warning that same-store sales contracted sharply in the period.

In addition to the slump in that key metric, revenue and an array of other indicators fell short of analysts’ expectations, prompting the shares to fall as much as 10.4 percent before paring much of the loss.

Chief Executive Officer Alasdair James attributed the company’s performance to a failure to correctly carry out its turnaround plan, citing a lack of product innovation and not enough store traffic.

“This isn’t about the plan being wrong, this is around our execution of bringing it to life,” James said on a call with analysts. “It’s disappointing to me to have to say on a call like this, that executional issues are all behind the performance, but that is the reality.”

Net sales declined 13 percent to $355.3 million, short of analysts’ average estimate of $361.2 million. This put pressure on the company’s gross margins, while same-store sales, an important gauge for retailers, declined 11.4 percent. Pier 1 reported preliminary results for the period on Sept. 20.

More obstacles also complicate the Pier 1’s outlook. About 59 percent of the company’s sales in the current fiscal year are from goods produced in China -- which are now subject to a 10 percent tariff. The Forth Worth, Texas-based company is also contending with higher freight expenses.

©2018 Bloomberg L.P.