Pier 1 1st Quarter Profit Up 26%; Raises Year View
06/14/2012| 06:58am US/Eastern
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By Victoria Stilwell
Pier 1 Imports Inc.'s (>> Pier 1 Imports, Inc.) fiscal first-quarter earnings rose 26% as the home-furnishings retailer's strong sales growth helped to improve margins.
The company also raised its full-year earnings guidance by 2 cents to a range between $1.08 and $1.14.
Pier 1 has made a turnaround since the recession, when it teetered on the brink of bankruptcy, struggled with declining sales and lost market share to discount retailers like Target Corp. (>> Target Corporation) and Wal-Mart Stores Inc. (WMT). Lately, Pier 1's recovery has gained momentum on higher traffic, increasing same-store sales and higher average receipt per customer as it remodeled stores and streamlined its merchandise variety.
The company in April refreshed its growth plan with a new three-year guide, having outgrown its previous roadmap two years early. Similar to the company's previous strategy, the plan focuses on increasing online sales as well as building new stores and remodeling existing locations.
For the period ended May 26, Pier 1 reported a profit of $17.8 million or 16 cents a share, up from $14.1 million, or 12 cents a share a year earlier.
Earnings matched the company's May guidance, which was in line with Wall Street expectations at the time.
Gross margin widened to 41.6% from 40.1%. Merchandise margin, which excludes store occupancy costs, widened to 60.2% from 59.8%.
Pier 1 earlier reported that total sales for the quarter rose 7.9% to $361.1 million, while same-store sales rose 7.2%, in line with expectations.
Shares closed Wednesday at $15.58 and were inactive premarket. The stock is up 12% so far this year.
Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
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