PIR
$1.83
Pier 1 Imports
($.04)
(2.14%)
Earnings Details
1st Quarter May 2018
Wednesday, June 27, 2018 4:15:00 PM
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Summary

Pier 1 Imports Beats

Pier 1 Imports (PIR) reported a 1st Quarter May 2018 loss of $0.36 per share on revenue of $371.9 million. The consensus estimate was a loss of $0.40 per share on revenue of $376.8 million. The Earnings Whisper number was for a loss of $0.39 per share. Revenue fell 9.2% compared to the same quarter a year ago.

The company said it expects a second quarter loss of $0.58 to $0.54 per share and a fiscal 2019 loss of $0.36 to $0.17 per share. The current consensus estimate is a loss of $0.23 per share for the quarter ending August 31, 2018 and a loss of $0.33 per share for the quarter ending February 28, 2019.

Pier 1 Imports Inc is a specialty retailer of imported decorative home furnishings and gifts in the North America. It conducts business as one operating segment and operates stores in the United States and Canada under the name Pier 1 Imports.

Results
Reported Earnings
($0.36)
Earnings Whisper
($0.39)
Consensus Estimate
($0.40)
Reported Revenue
$371.9 Mil
Revenue Estimate
$376.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Pier 1 Imports, Inc. Reports First Quarter Fiscal 2019 Financial Results; Provides Q2 Outlook; Full Year Fiscal 2019 Guidance Remains Unchanged

FORT WORTH, Texas--(BUSINESS WIRE)-- Pier 1 Imports, Inc. (NYSE:PIR) today reported financial results for the first quarter ended June 2, 2018.

First Quarter Fiscal 2019 Summary

  • Company comparable sales decreased 8.2%;
  • Net sales decreased 9.2% to $371.9 million;
  • Net loss of $28.5 million, or ($0.36) per share, better than Company guidance; and
  • Management unveiled its three-year strategic plan, Pier 1 2021: A New Day.

“We unveiled our three-year strategic plan in April 2018, at which point we laid out our expectations for the first quarter, full year fiscal 2019 and our overall three-year plan. Our first quarter performance was in line with those expectations,” said Alasdair James, President and CEO. “One quarter into our three-year journey, we are on track with execution and preparing for the re-launch of the Pier 1 brand this fall. Our teams are focused on strengthening our value proposition through refreshed merchandise assortments and sharper pricing; creating a more compelling shopping experience through enhanced merchandising and messaging; and developing dynamic marketing programs to support our new brand positioning – ‘Pier 1: This is me’.”

First Quarter Fiscal 2019 Results of Operations

Net sales for the first quarter of fiscal 2019 decreased 9.2% to $371.9 million, compared to $409.5 million for the first quarter of fiscal 2018. Company comparable sales decreased 8.2% versus the year-ago period. The Company operated 997 stores at the end of the quarter, a decrease of 19 from the first quarter of fiscal 2018.

Gross profit for the first quarter of fiscal 2019 totaled $120.1 million, or 32.3% of net sales, compared to $151.6 million, or 37.0% of net sales, for the first quarter of fiscal 2018.

Selling, general and administrative (“SG&A”) expenses for the first quarter of fiscal 2019 were $138.6 million, or 37.3% of net sales, compared to $140.2 million, or 34.2% of net sales, for the first quarter of fiscal 2018. The following table details the breakdown of SG&A expenses for the first quarter of fiscal 2019 as compared to last year (in millions).

    13 Weeks Ended
June 2, 2018       May 27, 2017
Expense     % Sales Expense     % Sales
 
Compensation for operations $ 56.6 15.2 % $ 56.1 13.7 %
Operational expenses 20.6 5.5 % 20.6 5.0 %
Marketing 26.5 7.1 % 29.5 7.2 %
Other selling, general and administrative   34.9 9.4 %   34.0 8.3 %
Total selling, general and administrative $ 138.6 37.3 % $ 140.2 34.2 %
 

Operating loss for the first quarter of fiscal 2019 was $31.3 million compared to operating loss of $2.3 million last year. Net loss for the first quarter of fiscal 2019 totaled $28.5 million, or ($0.36) per share, compared to net loss of $3.0 million, or ($0.04) per share, a year ago. EBITDA (earnings before interest, taxes, depreciation and amortization) in the first quarter of fiscal 2019 was negative $18.7 million compared to $11.6 million in the first quarter of fiscal 2018. A reconciliation of this non-GAAP measure to GAAP is provided below.

Balance Sheet Highlights

As of June 2, 2018, the Company had $156.8 million of cash and cash equivalents, $192.5 million outstanding under its senior secured term loan and no working capital borrowings outstanding under its $350 million secured revolving credit facility. Inventories at the close of the first quarter decreased 21.2% to $329.7 million, compared to $418.4 million a year ago.

Fiscal 2019 Outlook

The Company provided the following financial guidance for the second quarter and full year of fiscal 2019. Full year company comparable sales are on a 52-week basis. Full year per share data assumes approximately 80.5 million shares outstanding on a fully diluted basis.

Guidance Metric       Second Quarter       Full Year Fiscal 2019
· Company comparable sales       (7.0%) to (6.0%)       1.5% to 2.5%
· Net loss (GAAP)       ($47) million to ($43) million       ($29) million to ($14) million
· EBITDA (non-GAAP)       ($40) million to ($36) million       $30 million to $50 million
· Loss per share (GAAP)       ($0.58) to ($0.54)       ($0.36) to ($0.17)
           

First Quarter Fiscal 2019 Financial Results Conference Call

The Company will hold a conference call to discuss first quarter fiscal 2019 financial results at 3:30 p.m. Central Time/4:30 p.m. Eastern Time on Wednesday, June 27, 2018. A live audio webcast will be accessible at the Company’s website at https://investors.pier1.com. The call can also be accessed domestically at (866) 378-2926 and internationally at (409) 350-3152, conference ID 1376468.

Financial Disclosure Advisory

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release references EBITDA, a non-GAAP financial measure.

The Company believes that EBITDA allows management and investors to understand and compare results in a more consistent manner for the periods presented. EBITDA, as a non-GAAP financial measure, should be considered supplemental and not a substitute for the Company’s results reported in accordance with GAAP for the periods presented.

EBITDA represents earnings before interest, taxes, depreciation and amortization. Management believes EBITDA is a meaningful indicator of the Company’s performance, which provides useful information to investors regarding its financial condition and results of operations. Management uses EBITDA, together with financial measures prepared in accordance with GAAP, to assess the Company’s operating performance, to enhance its understanding of core operating performance and to compare the Company’s operating performance to other retailers. EBITDA should not be considered in isolation or used as an alternative to GAAP financial measures and does not purport to be an alternative to net income (loss) as a measure of operating performance. A reconciliation of net loss to EBITDA is shown below for the periods indicated (in millions).

        13 Weeks Ended
June 2, 2018       May 27, 2017
$ Amount     % of Sales $ Amount     % of Sales
EBITDA (non-GAAP) $ (18.7 ) (5.0 )% $ 11.6 2.8 %
Less: Income tax benefit (6.1 ) (1.6 )% (1.8 ) (0.5 )%
Interest expense, net 2.9 0.8 % 2.7 0.7 %
Depreciation   12.9   3.4 %   13.7   3.4 %
Net loss (GAAP) $ (28.5 ) (7.7 )% $ (3.0 ) (0.7 )%
 

Except for historical information contained herein, the statements in this press release or otherwise made by our management in connection with the subject matter of this press release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors. This press release includes forward-looking statements that are based on management’s current estimates or expectations of future events or future results. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “intend” and similar expressions. Management’s expectations and assumptions regarding future results are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements included in this press release. These risks and uncertainties include, but are not limited to: the impact of initiatives implemented in connection with the Company’s Pier 1 2021: A New Day three-year strategic plan; the effectiveness of the Company’s marketing campaigns, merchandising and promotional strategies and customer databases; consumer spending patterns; inventory levels and values; the Company’s ability to implement planned cost control measures; risks related to U.S. import policy; and changes in foreign currency values relative to the U.S. dollar. These and other factors that could cause results to differ materially from those described in the forward-looking statements contained in this press release can be found in the Company’s Annual Report on Form 10-K and in other filings with the SEC. Refer to the Company’s most recent SEC filings for any updates concerning these and other risks and uncertainties that may affect the Company’s operations and performance. Undue reliance should not be placed on forward-looking statements, which are only current as of the date they are made. The Company assumes no obligation to update or revise its forward-looking statements.

Pier 1 Imports is proud to offer one-of-a-kind-gotta-have-it-seriously-love-it products that help our customers tell their stories through home décor. Over the past 50 years we’ve grown from a single store to an omni-channel retailer reaching the whole of North America. Our customers shop us online and in store, and interact with us on social media. From the launch of our Pier 1 PICKS to our world renowned Papasan, we bring uniqueness and fun to the world of home décor. We are the perfect place for all your versions of “This is me.” To get inspired or simply get to know us a little better, visit pier1.com.

 
 

Pier 1 Imports, Inc.

                 
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
 
13 Weeks Ended
June 2, % of May 27, % of
2018 Sales 2017 Sales
 
Net sales $ 371,864 100.0 % $ 409,525 100.0 %
 
Cost of sales   251,725   67.7 %   257,928   63.0 %
 
Gross profit 120,139 32.3 % 151,597 37.0 %
 
Selling, general and administrative expenses 138,580 37.3 % 140,195 34.2 %
Depreciation   12,900   3.4 %   13,723   3.4 %
 
Operating loss (31,341 ) (8.4 %) (2,321 ) (0.6 %)
 
Nonoperating (income) and expenses:
Interest, investment income and other (317 ) (570 )
Interest expense   3,550       3,048    
  3,233   0.9 %   2,478   0.6 %
 
Loss before income taxes (34,574 ) (9.3 %) (4,799 ) (1.2 %)
Income tax benefit   (6,071 ) (1.6 %)   (1,813 ) (0.5 %)
 
Net loss $ (28,503 ) (7.7 %) $ (2,986 ) (0.7 %)
 
Loss per share:
Basic $ (0.36 ) $ (0.04 )
 
Diluted $ (0.36 ) $ (0.04 )
 
Dividends declared per share: $ -   $ 0.07  
 
Average shares outstanding during period:
Basic   80,187     81,080  
 
Diluted   80,187     81,080  
 

 

Pier 1 Imports, Inc.

           
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
 
June 2, March 3, May 27,
2018 2018 2017
ASSETS
 
Current assets:

Cash and cash equivalents, including temporary investments of $121,392, $115,456 and $152,978, respectively

$ 156,757 $ 135,379 $ 161,625
Accounts receivable, net 23,513 22,149 24,723
Inventories 329,747 347,440 418,424
Prepaid expenses and other current assets   48,136     48,794     31,464  
Total current assets 558,153 553,762 636,236
 

Properties and equipment, net of accumulated depreciation of $567,522, $554,477 and $519,016, respectively

170,662 178,767 181,390
Other noncurrent assets   44,350     39,790     42,467  
$ 773,165   $ 772,319   $ 860,093  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Accounts payable $ 86,531 $ 71,279 $ 98,517
Gift cards and other deferred revenue 48,247 55,281 62,987
Accrued income taxes payable 3,048 2,301 25,635
Current portion of long-term debt 2,000 2,000 2,000
Other accrued liabilities   124,523     106,268     129,330  
Total current liabilities 264,349 237,129 318,469
 
Long-term debt 197,608 197,906 198,781
Other noncurrent liabilities 54,420 59,714 62,085
 
Shareholders' equity:

Common stock, $0.001 par, 500,000,000 shares authorized, 125,232,000 issued

125 125 125
Paid-in capital 180,525 168,424 157,760
Retained earnings 704,749 726,232 728,268
Cumulative other comprehensive loss (7,374 ) (7,477 ) (8,306 )

Less -- 42,758,000, 41,974,000 and 40,208,000 common shares in treasury, at cost, respectively

  (621,237 )   (609,734 )   (597,089 )
Total shareholders' equity   256,788     277,570     280,758  
$ 773,165   $ 772,319   $ 860,093  
 

 

Pier 1 Imports, Inc.

 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
    13 Weeks Ended
June 2,     May 27,
2018 2017
 
Cash flows from operating activities:
Net loss $ (28,503 ) $ (2,986 )

Adjustments to reconcile to net cash provided by operating activities:

Depreciation 14,897 15,786
Stock-based compensation expense 310 1,100
Deferred compensation, net 751 750
Deferred income taxes (7,705 ) (1,216 )
Other (64 ) 382
Changes in cash from:
Inventories 17,625 (17,448 )
Prepaid expenses and other assets 1,064 (1,142 )
Accounts payable and other liabilities 34,196 34,129
Accrued income taxes payable, net of payments   667     (423 )
Net cash provided by operating activities   33,238     28,932  
 
Cash flows from investing activities:
Capital expenditures (12,159 ) (13,567 )
Proceeds from disposition of properties 36 -
Proceeds from sale of restricted investments 1,279 1,164
Purchase of restricted investments   (636 )   (526 )
Net cash used in investing activities   (11,480 )   (12,929 )
 
Cash flows from financing activities:
Cash dividends - (5,646 )
Purchases of treasury stock - (2,827 )
Stock purchase plan and other, net 288 135
Repayments of long-term debt   (500 )   (500 )
Net cash used in financing activities   (212 )   (8,838 )
 
Effect of exchange rate changes on cash (168 ) -
 
Change in cash and cash equivalents 21,378 7,165
 
Cash and cash equivalents at beginning of period   135,379     154,460  
 
Cash and cash equivalents at end of period $ 156,757   $ 161,625  
 

The Blueshirt Group
Christine Greany, 858-523-1732
christine@blueshirtgroup.com

Source: Pier 1 Imports, Inc.