Pier 1 Net Falls 46 Percent in Third Quarter
FORT WORTH, Texas--Although it was the company's fifth consecutive quarter with a profit, Pier 1 Imports' net income dropped 46 percent to $21 million in its fiscal third quarter.
In its statement detailing the results, the company noted that last year's bottom line received a $55.9 million boost from an income-tax benefit that stemmed from the Worker, Homeownership and Business Assistance Act, which became law during the third quarter of last year. Without that benefit, Pier 1 posted a pretax loss of $16.8 million.
Net sales for this year's third quarter, which ended on Nov. 27, rose 8.2 percent to $353.8 million, including a same-store sales increase of 10.2 percent. Gross margin gained 408 basis points to finish the quarter at 40.7 percent. Increases in store traffic, conversion rate and average ticket, along with reductions in clearance activity and vendor and supply-chain costs, helped bolster both of these numbers. Selling, general and administrative expenses rose 5.2 percent in dollars, but declined 90 basis points as a percentage of sales to 33.2 percent.