Pier 1 Imports reports narrower loss in Q2

FORT WORTH, Texas Pier 1 Imports reported a narrow loss in its second-quarter results, compared with the year-ago period.

The company reported a net loss of $16 million, or $0.17 per share, for the second quarter, versus a net loss of $30 million, or $0.34 per share, for the same period last year. Operating results improved by $13 million to a loss of $15 million. Total sales for the second quarter declined to $287 million from $320 million in the year-ago quarter. Comparable store sales during the quarter declined 7.6% which can be attributed to reductions in traffic related to the declines in the overall economic environment. Without the effects of Canadian currency conversion rates, the decline in comparable store sales during the fiscal quarter was 6.9%.

Merchandise margins for the quarter were 52% of salesm compared with 49% of sales in the same period last year. Merchandise margins were positively impacted by reduced markdown activity as well as strong initial mark ups. Store occupancy costs were $68 million, compared with $72 million last year. The decline was primarily the result of negotiated rental reductions as well as a lower overall store count.

Despite the "pressure of the economic environment", president and CEO Alex W. Smith said that the second-quarter "sales, merchandise margin and operating results continued to exceed our internal budgets."

“Looking ahead, we feel very well positioned for the third quarter," said Smith. "Our level of clearance inventory is very low and our initial markups are strong. Consequently, we expect to continue to see significant improvements in merchandise margin on a year over year basis. As previously indicated, our purchases for the fall and holiday selling season were less cautious than the first half as we anticipate a stronger sales trend in the third and fourth quarter. Customers are responding positively to our fall merchandise, and although it is early in the quarter, we are generating positive comparable store sales so far in September. Our stores look really good and we are looking forward to the holiday transition which will begin in October.”