Pier 1 Doubles Fourth-Quarter Net, Sets Three-Year Growth Plan
FORT WORTH, Texas-As Pier 1 Imports rounded out its most recent fiscal year with a strong bottom line in its fourth quarter, the company laid out a new plan to drive both sales and profits over the next three years.
Net income in the fourth quarter, which ended on Feb. 25, rose 102 percent to $115.2 million, propelling the specialty retailer to a gain of 69 percent in net income for the fiscal year, to $168.9 million. Pier 1's bottom line benefited from a 12 percent jump in net sales to $476.8 million, including a 10.3 percent rise in same-store sales. For the fiscal year, net sales totaled $1.5 billion, up 9.8 percent and including a 9.5 percent increase in same-store sales.
The new three-year growth plan includes enhancing its e-commerce platform with the launch of Pier 1 To-You, its online shopping service, in late July; and the rollout of a new point-of-sale system this fall. Pier 1 also intends to continue its program to remodel and refurbish its stores with enhanced merchandise fixture package and lighting upgrades, open 80 to 100 new stores and close 30 to 50 existing stores by 2016, relocate some existing stores in major markets and continue to invest in technology to improve processes and efficiencies throughout its organization.
Alex Smith, Pier 1's president and CEO, said the new plan will support the company's continuing evolution as a multichannel retailer along with driving store productivity in sales and efficiency. "We continue to expect that online sales will contribute at least 10 percent of total revenues by fiscal year 2016," Smith said.
Fourth-quarter gross margin gained 270 basis points to 45.5 percent, benefited by the balance between regular and promotional pricing, and the management of inventory levels. Selling, general and administrative expenses increased 12 percent in dollars but shed 10 basis points as a percentage of sales, to 27.8 percent.
For the new fiscal year, Pier 1 is projecting an increase in same-store sales in the mid-single-digit range.