Pier 1 Posts Strong Q3 Results

potteryPier 1 Imports Inc. (NYSE: PIR) reported third-quarter fiscal 2013 results before the markets opened this morning. The home furnishing retailer reported adjusted diluted earnings per share (EPS) of $0.25 on revenues of $424.5 million. In the same period a year ago, Pier 1 reported EPS of $0.21 on revenue of $382.7 million. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.24 and $418.49 million in revenue.

On a GAAP basis, Pier 1 reported EPS of $0.22, which excludes the estimated impact on net income of Hurricane Sandy. Same-store sales for the quarter rose 7.9% year-over-year.

Pier 1 also announced a 25% increase to the company's quarterly dividend to $0.05 a share, and a third $100 million share buyback program.

The company's CEO said:

This marks the Company's first full quarter of e-Commerce sales and we're pleased with the initial results, as the level of both new and existing customer visits indicates the long-term opportunity is significant. Indeed, we saw very strong traffic at both our stores and Pier1.com during the period, and trends have remained robust thus far in the holiday selling season.

The company guided fiscal fourth-quarter adjusted EPS at $0.57 to $0.61 ($0.55 to $0.59 on a GAAP basis) and expects same-store sales to rise in the mid single-digit range. The consensus estimate called for EPS of $0.58. The estimate is based on a comparable 13-week quarter, but the quarter has 14 weeks. The extra week will add about $0.02 to EPS according to the firm.

For the full 2013 fiscal year ending in February, Pier 1 expects adjusted EPS of $1.17 to $1.21. Same-store sales are expected to grow in the mid single-digit range. Actual EPS will get the same $0.02 bump from the 53-week fiscal year.

Gross profits rose 0.7% to 43.9% and operating income was up 9.1% in the third quarter. Net income fell slightly, however, by 0.4% to 5.6%. The rise in same-store sales is put down to an increase in store traffic and a higher average ticket. The CEO's comments indicate that these trends have continued into the holiday shopping season, so perhaps the fourth quarter will be another pleasant surprise for shareholders.

Pier 1's shares are up 1.5% in premarket trading this morning, at $19.30 in a 52-week range of $12.50 to $21.24. Thomson Reuters had a consensus analyst price target of around $22.90 before today's results were announced.

Paul Ausick


Filed under: 24/7 Wall St. Wire, Consumer Goods, Earnings Tagged: PIR

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