Pier 1 Q4 profit jumps; three-year growth plan includes store upgrades and tech investments
Fort Worth, Texas -- Pier 1 Imports Inc. on Thursday said that its fiscal fourth-quarter profit more than doubled on increased store traffic and a one-time tax benefit that boosted its bottom line. The chain also announced a new three-year growth plan that includes store updates and investments in technology.
Pier 1 reported net income of $115.2 million for the three months ended Feb. 25, up from $57.1 million a year earlier. Revenue rose 12% to $476.8 million, from $426.6 million, beating Wall Street's estimate of $474.5 million. Same-store sales rose 10.3%.
As part of its new growth plan, Pier I will improve its store portfolio through refurbishments, remodels, new openings and strategic relocations. During fiscal 2013, the retailer will remodel approximately six to eight locations and refurbish approximately 100 existing stores, with an enhanced merchandise fixture package and lighting upgrades. It also will integrate new merchandise fixture elements into all stores that are expected to increase sales productivity and drive customer impulse purchases.
Pier I, which plans to open approximately 20 locations in fiscal 2013, said it remains on track to open approximately 80 to 100 stores and close approximately 30 to 50 existing locations by the end of fiscal 2016.
The chain’s new growth plan also calls for strategic investments in technology. The company is on track for the initial rollout of a new POS system in fall 2012, which will be followed by an all store rollout post-holiday. It cited established agreements with its POS partners, including Epicor and NCR.
In addition to investments in information technology related to e-commerce and its new POS, the company plans to replace legacy systems and enhance existing systems in areas including merchandise and SKU level planning, vendor portals, inventory and warehouse management.
In a statement, president and CEO Alex Smith said Pier I now anticipates recording sales of $225 per retail square foot, up from $200 per retail square foot, by fiscal 2015.
It also raised its operating margin goal for the three-year period to at least 12%, up from 10%.
Pier 1 also said Thursday that it will launch its Pier 1 To-You e-commerce site in late July.
For the year, Pier 1 reported net income of $168.9 million, up from $100.1 million in the prior year. Annual revenue climbed 9% to $1.53 billion, from $1.4 billion. Same-store sales rose 9.5%.