Pier 1 Imports Profit Slips, But In Line; Stock Up 5%

(RTTNews) - Pier 1 Imports Inc. (PIR) Wednesday reported a drop in profit for the first quarter as increased revenues were offset by lower margins and higher operating costs. The home furnishing retailer's earnings for the quarter came in line with estimates, but revenues fell short of expectations. Following the news, Pier 1 shares gained 5 percent in the after-hours trade.

Fort Worth, Texas-based Pier 1 Imports' first-quarter profit dropped to $6.9 million or $0.08 per share from $15 million or $0.16 per share last year. On average, 17 analysts polled by Thomson Reuters expected earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the first quarter grew about 3 percent to $432.0 million from $419.1 million last year. Analysts had a consensus revenue estimate of $434.5 million for the quarter.

Comparable sales increased 2 percent in the quarter. Gross margins dropped to 38.1 percent from 40.0 percent last year, while selling, general and administrative expenses rose to $138.7 million from $131.5 million last year.

Commenting on the company's top line growth, CEO Alex Smith said, "From a top-line perspective, we exited the quarter with May company comparable sales growth of 4 percent. March was nearly as strong, while we experienced some slower weeks during the month of April, similar to what many others in the industry have observed. Now that we are into June and at the leading edge of our summer clearance event, company comparable sales are trending in excess of May results."

Looking ahead to the second quarter, the company expects earnings of $0.07 to $0.08 per share and comparable sales growth of 4 to 5 percent. Analysts currently expect earnings of $0.08 per share for the quarter.

For the full year 2016, the company still expects earnings of $0.83 to $0.87 per share. Analysts currently expect earnings of $0.84 per share for 2016.

Pier 1 now expects 2016 comparable sales growth of 3 to 5 compared to its prior guidance for mid-single digit growth.

PIR closed Wednesday's trading at $12.01, down $0.14 or 1.15%, on the NYSE. The stock, however, gained $0.61 or 5.08% in the after-hours trade.