Categories Earnings, Retail

Pier 1 Imports posts wider-than-expected Q1 2020 loss

Pier 1 Imports Inc. (NYSE: PIR) reported a wider loss in the first quarter of 2020 due to the recently effected 1-for-20 reverse stock split. The bottom line came wider than the analysts’ expectations while the top line missed consensus estimates.

Net loss was $81.7 million or $19.97 per share, wider than a loss of $28.5 million or $7.11 per share in the previous year quarter.

Net sales fell by 15.5% to $314.3 million. Comparable sales decreased by 13.5% due to lower average customer spend, which is primarily attributable to changes in the company’s merchandise mix, as well as decreased store traffic. The company operated 967 stores at the end of the first quarter, a decrease of 30 from last year.

The company’s sales and margins remained under pressure as expected in the first quarter and anticipate this to continue through the second quarter. This reflected the company’s decision to take aggressive clearance actions to move through lower-priced, lower-margin goods and ensure providing customers with a strong, on-brand style statement for fall.

Also read: BMW unveils new electric motorcycle, car concept

For the first quarter, the gross margin fell to 25.1% from 32.3% in the prior-year quarter. This decline reflects increased promotional and clearance activity in merchandise, as well as 270 basis points of deleveraging on occupancy costs.

The company remained on track to achieve the previously outlined benefits of $100 million to $110 million this year and now expects the substantial majority of those benefits to be realized through cost reductions. The expense savings the company plans to realize in the second half of fiscal 2020 are expected to be absorbed by lower gross margins rather than driving the full year net income and EBITDA recapture it previously outlined.

As implementing fiscal 2020 action plan, the company is incorporating learnings and addressing business trends in real-time. The company believes its initiatives and liquidity will give it sufficient runway to achieve fiscal 2020 goals.

Shares of Pier 1 Imports ended Wednesday’s regular session up 1.39% at $8.78 on the NYSE. Following the earnings release, the stock dropped over 12% in the after-market session.

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Pier 1 Imports posts wider-than-expected Q1 2020 loss

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment
Loading...

Cancel
Viewing Highlight
Loading...
Highlight
Close
Top