Fort Worth, TX, June 14--Pier 1 Imports reported a quarterly loss in line with dampened expectations, but forecast lower-than-expected results for the current period, saying weak customer traffic is hurting margins and sales.
This was the 10th time in the past year that the home furnishings chain has warned its earnings would miss Wall Street expectations. Pier 1's shares dipped 2 percent in premarket trading on the Inet electronic brokerage.
For the first quarter ended May 28, Pier 1 reported a loss of $12.5 million, or 14 cents per share, compared with a year-earlier profit of $11.7 million, or 13 cents per share.
Sales at stores open at least one year, a key performance measure for retailers known as comparable-store sales, fell 12 percent during the quarter, while total sales fell 6.1 percent to $405.7 million.
Results for the quarter were generally in line with the company's lowered outlook provided earlier this month, when it forecast a loss of 13 cents to 15 cents per share. Following that, Wall Street analysts dropped their loss estimates to an average of 14 cents per share from 9 cents, according to Reuters Estimates.
"Although we began the new fiscal year with guarded optimism on changes to the company's marketing and merchandising programs, we have been disappointed by slow customer response and continued weak traffic in stores," Pier 1 chief executive Marvin Girouard said in a statement.
For the current second quarter, the company forecast a further decline in sales as it clears out spring and summer stock in advance of the fall merchandise season. Its bottom line could range from a profit of 3 cents per share to a loss of as much as 7 cents, short once again of analysts' estimates.
Analysts have been looking for Pier 1 to bounce back to a profit of 5 cents per share for the period.
The company said it expects second-quarter comparable-store sales to decline in the mid-to-high single-digit range. Given the continuing promotionally driven sales environment, Pier 1 estimated gross profit at 34 percent to 32 percent.
