Exhibit 99.1
FORT WORTH, TEXAS, September 16, 2003 - Pier 1 Imports, Inc. (NYSE:PIR) today
reported diluted earnings per share of $0.20 for the second quarter ended August
30, 2003, compared to $0.23 per diluted share for the year-ago period, in line
with the Company's September 4th guidance. Net income was $18,436,000, compared
to last year's net income of $22,073,000. Sales for the second quarter were
$427,831,000, a 4.1% increase over last year's $410,902,000, and second fiscal
quarter comparable store sales declined by 4.2%.
For the six months ended August 30, 2003, diluted earnings per share amounted to
$0.41, compared to $0.46 per diluted share for the year-ago period. Net income
for the six months was $37,498,000, compared to last year's $44,254,000 for the
six-month period. Sales for the fiscal 2004 first six months amounted to
$830,543,000, up 4.4% from $795,331,000 for the year ago period. Comparable
store sales declined 3.8% for the six-month period that ended August 30, 2003.
As previously reported, projections for comparable store sales in September
continue to be in a range of -2% to -5%, and third quarter comparable store
sales are projected to be in a range of flat to -4%, resulting in third quarter
diluted earnings estimates of $0.28 to $0.33 per share for the three months
ending November 29, 2003. Fiscal 2004 fourth quarter diluted earnings are
projected to be in a range of $0.62 to $0.66 per share.
Marvin J. Girouard, the Company's Chairman and Chief Executive Officer, said,
"Traffic and transactions were down, and average ticket grew during the second
quarter over the year-ago period. Although the macroeconomic environment
improved slowly throughout the summer, our customer traffic counts remained
below last year. Merchandise margins during the second quarter increased over
last year, primarily due to less clearance activity versus the year-ago period.
Gross profit as a percentage of sales was lower during the second quarter
compared to last year due to the effect of fixed store occupancy costs on
negative comparable store sales for the period. Additionally, de-leveraging
occurred on fixed selling, general and administrative expenses during the second
quarter.
"At the beginning of this year, due to global unrest and uncertain domestic
economic conditions, we were intentionally conservative on inventories, which in
hindsight cost us planned sales. We now have accelerated orders and encouraged
vendors to ship early or on time in order to build inventories and increase the
level of new, exciting merchandise in stores. In addition, we will closely
evaluate our marketing initiatives for the future. Beginning in September and
continuing throughout the fall and holiday season, our plans include increasing
the frequency of newspaper inserts, featuring distinct well-priced promotional
merchandise for each event.
"Our balance sheet improved with cash balances at the end of the quarter of $186
million, up $36 million from last year's second quarter cash balances of $150
million. In the second quarter, we repurchased 1.1 million shares of Pier 1
stock at a cost of $21.1 million. Through the first six months of fiscal 2004
that ended August 30, 2003, we repurchased 2.2 million shares, or $41.6 million
of Pier 1 Common Stock, with $112.4 million remaining in our share repurchase
program."
The Company will host a conference call to discuss fiscal 2004 second quarter
earnings at 10:00 a.m. Central Time today. A web cast is available on our
website at www.pier1.com linking through to the "About Us" page and the
"Investing" page, or you can dial into the conference at 706-643-0435, ID number
2418962. The teleconference will be held in a "listen-only" mode for all
participants other than the Company's current sell-side and buy-side investment
professionals. The replay will be available at about 12:00 pm (Central) for 24
hours and replay access can be dialed at 800-642-1687 or if international dial
706-645-9291 and reference the conference ID number 2418962.
Any forward-looking projections or statements made in this press release should
be considered in conjunction with the cautionary statements contained in the
Company's most recently filed Form 10-Q for fiscal year 2004. Management's
expectations and assumptions regarding planned store openings, financing of
Company obligations from operations and other future results are subject to
risks, uncertainties and other factors that could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements. Risks and uncertainties that may affect Company
operations and performance include, among others, the effects of terrorist
attacks or other acts of war, conflicts or war involving the United States or
its allies or trading partners, labor strikes, weather conditions that may
affect sales, volatility of fuel and utility costs, the general strength
of the economy and levels of consumer spending, consumer confidence, the
availability of new sites for expansion along with sufficient labor to
facilitate growth, the strength of new home construction and sales of existing
homes, the availability and proper functioning of technology and communications
systems supporting the Company's key business processes, the ability of the
Company to import merchandise from foreign countries without significantly
restrictive tariffs, duties or quotas and the ability of the Company to source,
ship and deliver items from foreign countries to its U.S. distribution centers
at reasonable prices and rates and in a timely fashion.
The Company assumes no obligation to update or revise its forward-looking
statements even if experience or future changes make it clear that any projected
results expressed or implied will not be realized.
Pier 1 Imports, Inc. is North America's largest specialty retailer of imported
decorative home furnishings and gifts with Pier 1 Imports(R) stores in 50
states, Puerto Rico, Canada, and Mexico; The Pier(R) stores in the United
Kingdom; and Cargokids(R).
(Financial Tables Follow)
Pier 1 Imports, Inc.
COMPARATIVE OPERATING RESULTS
FOR THE THREE AND SIX MONTHS ENDED
AUGUST 30, 2003 AND AUGUST 31, 2002
(in thousands except per share amounts)
<Table>
<Caption>
Three Months Ended Six Months Ended
August 30, August 31, August 30, August 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net Sales $ 427,831 $ 410,902 $ 830,543 $ 795,331
========== ========== ========== ==========
Net Income $ 18,436 $ 22,073 $ 37,498 $ 44,254
========== ========== ========== ==========
Earnings Per Share:
Basic $ 0.21 $ 0.24 $ 0.42 $ 0.47
========== ========== ========== ==========
Diluted $ 0.20 $ 0.23 $ 0.41 $ 0.46
========== ========== ========== ==========
</Table>
Pier 1 Imports, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(unaudited)
<Table>
<Caption>
Three Months Ended Six Months Ended
August 30, August 31, August 30, August 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net sales $ 427,831 $ 410,902 $ 830,543 $ 795,331
Operating costs and expenses:
Cost of sales (including buying and
store occupancy costs) 258,719 245,973 493,234 466,409
Selling, general and administrative
expenses 127,725 118,612 253,503 236,945
Depreciation and amortization 12,263 11,329 24,424 22,060
---------- ---------- ---------- ----------
398,707 375,914 771,161 725,414
---------- ---------- ---------- ----------
Operating income 29,124 34,988 59,382 69,917
Nonoperating (income) and expenses:
Interest and investment income (524) (699) (1,161) (1,536)
Interest expense 385 645 1,022 1,203
---------- ---------- ---------- ----------
(139) (54) (139) (333)
---------- ---------- ---------- ----------
Income before income taxes 29,263 35,042 59,521 70,250
Provision for income taxes 10,827 12,969 22,023 25,996
---------- ---------- ---------- ----------
Net income $ 18,436 $ 22,073 $ 37,498 $ 44,254
========== ========== ========== ==========
Earnings per share:
Basic $ 0.21 $ 0.24 $ 0.42 $ 0.47
========== ========== ========== ==========
Diluted $ 0.20 $ 0.23 $ 0.41 $ 0.46
========== ========== ========== ==========
Average shares outstanding during period:
Basic 89,410 93,032 89,778 93,370
========== ========== ========== ==========
Diluted 91,622 95,471 91,910 96,042
========== ========== ========== ==========
</Table>
Pier 1 Imports, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
<Table>
<Caption>
August 30, March 1, August 31,
2003 2003 2002
---------- ---------- -----------
(unaudited) (unaudited)
ASSETS
Current assets:
Cash, including temporary investments of $175,685,
$225,882 and $137,919, respectively $ 185,888 $ 242,114 $ 149,513
Beneficial interest in securitized receivables 41,856 40,538 40,831
Other accounts receivable, net 10,939 11,420 12,494
Inventories 369,215 333,350 357,252
Prepaid expenses and other current assets 44,129 36,179 40,482
---------- ---------- ----------
Total current assets 652,027 663,601 600,572
Properties, net 245,118 254,503 233,497
Other noncurrent assets 50,373 49,383 47,144
---------- ---------- ----------
$ 947,518 $ 967,487 $ 881,213
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 6,000 $ 393 $ 388
Accounts payable 94,434 76,742 90,346
Gift cards, gift certificates and merchandise credits
outstanding 39,273 37,924 31,061
Accrued income taxes payable 1,446 25,798 12,263
Other accrued liabilities 91,936 102,732 76,920
---------- ---------- ----------
Total current liabilities 233,089 243,589 210,978
Long-term debt 19,000 25,000 25,000
Other noncurrent liabilities 60,134 54,962 47,073
Shareholders' equity:
Common stock, $1.00 par, 500,000,000 shares authorized,
100,779,000 issued 100,779 100,779 100,779
Paid-in capital 144,456 144,247 144,052
Retained earnings 564,728 539,776 464,808
Cumulative other comprehensive loss (1,222) (2,210) (2,797)
Less -- 11,806,000, 10,045,000 and 8,426,000 common
shares in treasury, at cost, respectively (173,446) (138,656) (108,680)
---------- ---------- ----------
635,295 643,936 598,162
---------- ---------- ----------
$ 947,518 $ 967,487 $ 881,213
========== ========== ==========
</Table>
Pier 1 Imports, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<Table>
<Caption>
Six Months Ended
August 30, August 31,
2003 2002
---------- ----------
Cash flow from operating activities:
Net income $ 37,498 $ 44,254
Adjustments to reconcile to net cash provided by
operating activities:
Depreciation and amortization 30,830 26,642
Loss on disposal of fixed assets 417 448
Deferred compensation 4,453 2,967
Tax benefit from options exercised by employees 1,312 4,498
Other 2,395 559
Changes in cash from:
Inventories (35,865) (81,819)
Other accounts receivable and other current assets (4,841) (6,126)
Accounts payable and accrued expenses 7,545 21,917
Accrued income taxes payable (24,352) (17,475)
Other noncurrent assets (1,014) (542)
Other noncurrent liabilities (500) (500)
---------- ----------
Net cash provided by (used in) operating activities 17,878 (5,177)
---------- ----------
Cash flow from investing activities:
Capital expenditures (46,387) (46,598)
Proceeds from disposition of properties 23,506 629
Beneficial interest in securitized receivables (1,918) 3,789
---------- ----------
Net cash used in investing activities (24,799) (42,180)
---------- ----------
Cash flow from financing activities:
Cash dividends (12,546) (9,356)
Purchases of treasury stock (41,554) (40,161)
Proceeds from stock options exercised,
stock purchase plan and other, net 5,185 11,142
Repayments of long-term debt (390) (364)
---------- ----------
Net cash used in financing activities (49,305) (38,739)
---------- ----------
Change in cash and cash equivalents (56,226) (86,096)
Cash and cash equivalents at beginning of period 242,114 235,609
---------- ----------
Cash and cash equivalents at end of period $ 185,888 $ 149,513
========== ==========
</Table>
Contact:
Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400