Pier 1 net income jumps 65.4% in 4Q; will invest $200M in growth
Furniture Today Staff -- Home Accents Today, 4/11/2011 4:35:58 PM
Pier 1 Imports' net income increased 65.4% in its fiscal fourth quarter as sales rose 7.7% with same-store sales climbing 8.9%. Sales of $426.6 million were up from $396 million with gains in store traffic, conversion rate and average ticket.
The company achieved a positive operating profit in the fiscal year ended Feb. 26 for the first time in six years, with merchandise margins improving to 58.4% of sales from 55.8% the previous fiscal year.
Sales for the latest year were just shy of $1.4 billion, up from $1.29 billion the previous year.
Alex Smith, president and CEO, said the company has a new three-year growth plan designed to improve sales, profits and shareholder value.
The plan calls for an investment of about $200 million over the next three years to speed up its e-commerce initiative, improve infrastructure and technology, remodel existing stores and open new ones.
The retailer said 90% of its existing stores will be affected by store improvement initiatives over the next three years, noting among other things that it has developed new merchandise fixtures designed to give stores a more open look and provide mobility and flexibility for merchandise resets and seasonal changes.
The company will roll out the fixtures to select stores, at first concentrating on its higher-volume stores. In addition, store remodels will range from minor cosmetic improvements in most cases to major overhauls including new flooring, lighting and fixtures.
Pier one also said it expects to add a net 54 stores over the next five years after some store closings, growing to about 1,100 stores in new and existing markets in the United States and Canada.
Technology investments over the next three years will include a new point-of-sale system and investments in the e-commerce platform, as well as replacing older software systems and enhancing existing ones in areas including labor scheduling, merchandise planning, warehouse management and store analytics.
The three-year investment will be funded by the retailer's cash flow from operations, the company said. And the plan "will allow us to continue to build strength and sustainability into our business, improve top and bottom line results and with an overall goal of increasing shareholder returns," Smith said.
--From reports by Jay McIntosh and Clint Engel, Furniture Today
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