Pier 1 to Ramp Up Hiring, But Outlook Disappoints

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Published April 11, 2013

| FOXBusiness

Fueled by increases in store traffic and average tickets, Pier 1 Imports (PIR) revealed a stronger-than-expected improvement in fourth-quarter sales on Thursday and said it plans to increase headcount in an effort to spur growth.

A disappointing fiscal 2014 outlook, however, weighed on its shares in early trade, pushing them down nearly 5% to $22.21.

The Fort Worth, Texas-based home furnishings retailer said it sees full-year earnings in the range of $1.26 to $1.31 a share, below the consensus view of $1.38, on same-store sales growth in the mid-single-digit range.

It also anticipates capital expenditures of $75 million as it looks to make “prudent investments,” including adding to its workforce. 

“Now that our transformation to a multi-channel retailer is well underway, the business is at an important inflection point,” Pier 1 CEO Alex Smith said in a statement.

The company did not immediately respond to FOX Business for a comment regarding the timeline and extent of workforce additions.

The mixed outlook came as the specialty retailer reported net income in its latest quarter of $61.7 million, or 58 cents a share, compared with a year-earlier profit of $115.2 million, or $1.04 a share.

Excluding one-time items, Pier 1 said it earned 60 cents, matching average analyst estimates in a Thomson Reuters poll.

Revenue for the three months ended March 2 grew 15.7% to $551.6 million from $476.8 million a year ago, edging just above the Street view of $551.4 million.

Same-store sales, a key measurement of sales at stores open longer than a year, increased 7.9%, however merchandise margins at the store level were relatively flat compared with last year.

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