Pier 1 Imports (PIR) Poised to Rebound?

Pier 1 Imports (NYSE: PIR) was up over 5% on Tuesday, March 7, 2016, on above normal volume. Traders exchanged 5.26M shares on Tuesday, while the average daily volume was 3.249M shares. PIR has been significantly underperforming the market in 2017, posting a return of -16.86%, while the S&P 500 Index was up 6.20% over the same period.

Take a look at PIR’s recent performance.

PIR has been trading in a downtrend since the beginning of 2017. However, its new preliminary fourth quarter and full-year fiscal 2017 financial results indicate the company may be turning around.

Pier 1 Imports Reports Preliminary 4QFY17 Financial Results

On March 6, 2017, Pier 1 Imports announced its preliminary financial results for the fiscal year ended on Feb. 25, 2017. For the 4QFY17, the company’s net sales decreased by approximately 2.6%, when compared to the same period last year. However, this was attributed to the decrease in the average number of stores year over year. Pier 1 Imports’ comparable sales, including e-Commerce, rose by approximately 0.2%.

The most eye-catching piece was the company’s e-Commerce growth rate. The company seems to be moving more towards e-Commerce, as opposed to the traditional brick and mortar. That in mind, e-Commerce sales grew by an impressive 28%, when compared to the same period last year. In turn, this represented nearly 20% of its net sales during the fourth quarter.

The company reported preliminary earnings results above the previous guidance. For the fourth quarter, GAAP EPS is expected to be between 31 cents and 33 cents per share. This was favorable to the previous guidance was between 26 cents and 30 cents per share.

On a non-GAAP basis, fourth quarter EPS is expected to range between 32 cents and 34 cents per share. However, the previous guidance was 28 cents to 32 cents per share. Keep in mind the non-GAAP EPS excludes the estimated costs of approximately $2M related to the former CEO’s departure from the company.

Pier 1 Imports Preliminary Full-Year Fiscal 2017 Results

Now, let’s look at some of the highlights of the preliminary financial results, which could boost PIR’s stock price. For the 2017 fiscal year, e-Commerce sales grew by approximately 20%, when compared to the 2016 fiscal year. Moreover, this represented 20% of Pier 1 Imports’ net sales for the 2017 fiscal year.

On a GAAP basis, Pier 1 Imports is expected to report an EPS between a range of $0.35-$0.37 per share. This new guidance is above the prior guidance range of 30 cents to 34 cents per share. On a non-GAAP basis, the company expects its EPS to be in a range between $0.42-$0.44 per share. Again, this was above its prior guidance of 37 cents to 41 cents per share. However, take note that the adjusted EPS figure excludes the estimated costs of approximately $10M, which is related to the former CEO’s departure from Pier 1 Imports.

According to Jeffrey N. Boyer, Pier 1 Imports Executive Vice President and Chief Financial Officer, “We are pleased with our preliminary fourth quarter financial results…We are raising our estimates for earnings per share and adjusted earnings per share for the fourth quarter and full year as a result of a number of key factors. Improved effectiveness of our promotional and discounting initiatives along with a continuation of our supply-chain efficiencies drove another quarter of significantly higher merchandise margin.”

Pier 1 Imports Could Rebound

Boyer continued to exude his confidence in the company by stating, “We are entering fiscal 2018 in a strong position both operationally and financially...With our solid balance sheet, seasoned executive team and associates who are highly committed to the Pier 1 Imports brand, we are well positioned to continue leveraging our omni-channel capabilities and deliver increased value to our shareholders.”

That in mind, Pier 1 Imports upbeat preliminary fourth quarter and full-year fiscal 2017 financial results may be indicating the company could be headed in the right direction. The stock has been down over 15% YTD, but these preliminary results shouldn’t go unnoticed because it could push shares higher.


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