Pier 1 Imports Net Rises, Strong 4th Quarter Seen
FORT WORTH, Texas – Home furnishings retailer Pier 1 Imports Inc. on Tuesday reported a 6 percent rise in fiscal third-quarter net income and said it expects fourth-quarter profits at the higher end of analysts' expectations as sales momentum continues through December.
The company, which raised its third-quarter outlook three times in about a month, said it expects to post earnings of 40 cents to 42 cents a share for the fourth quarter ending in February.
Wall Street analysts polled by research firm Thomson Financial/First Call are expecting a profit of 36 cents to 43 cents a share, with a mean estimate of 38 cents.
Industry experts have said Pier 1 keeps rolling while other U.S. retailers are struggling because it can keep its merchandise fresh, unique and reasonably priced, giving customers a feeling that they are buying items they cannot get anywhere else.
Like several other home products retailers, Pier 1 has also benefited from a renewed focus by consumers on their homes. After the Sept. 11 attacks on the United States, more Americans have been opting to entertain their families and friends at home rather than travel.
Pier 1 Chairman and Chief Executive Marvin Girouard said in a statement on Tuesday that the company's strong third-quarter performance is due to a solid merchandise offering and customers' quest for value.
TRAFFIC, TRANSACTIONS UP
Girouard said customer traffic and transactions increased during the third quarter due to the company's national television advertising campaign, direct mailings and newspaper inserts during the last 10 weeks of the quarter.
``As a result, our financial performance exceeded our expectations,'' he said.
Pier 1's net income for the three months ended Dec. 1 rose to $25 million, or 26 cents a diluted share, from $23.6 million, or 24 cents a diluted share, a year earlier.
On Dec. 6, Pier 1 had increased its third-quarter outlook to 25 cents to 26 cents a share from a Nov. 26 forecast of 21 cents and 23 cents, and analysts raised their estimates accordingly.
The company raised its expectations as it reported a 12.5 percent increase in November sales at stores open at least one year, far above the 6 percent to 8 percent it had estimated late last month.
The late November forecast was higher than one given by the company earlier in the month, which in turn was up from an outlook presented in October.
Sales for the third quarter rose 13 percent to $387.4 million from $343.5 million a year earlier, while sales at stores open at least one year -- a key measure of retail growth -- rose 5.1 percent.
Shares of Pier 1 closed at $16.60 in Monday New York Stock Exchange trade. Over the past year, the stock has risen 88 percent, while the Standard & Poor's retail index is up only 10 percent.