Exhibit 99.1
Pier 1 Imports Reports Fiscal 2004 First Quarter Earnings; Provides
Sales and Earnings Guidance for Second Quarter and Fiscal Year
FORT WORTH, Texas--(BUSINESS WIRE)--June 17, 2003--Pier 1 Imports,
Inc. (NYSE:PIR) today reported diluted earnings per share of $0.21 for
the first quarter ended May 31, 2003, compared to $0.23 per diluted
share for the year ago period. Sales for the first quarter were
$402,712,000, a 4.8% increase over last year's $384,429,000, and first
fiscal quarter comparable store sales declined by 3.6%. Net income was
$19,062,000, compared to last year's net income of $22,181,000.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "Sales and earnings for the first quarter reflected a
more cautious consumer due to continuing weakness in the economy,
international and political instability, as well as adverse weather
conditions delaying the beginning of the important spring selling
season. Despite these factors and tough sales comparisons to last year
during the quarter, we are pleased to report that Pier 1's sales
strengthened each month with higher traffic and average ticket
transactions building since the fiscal year began March 2nd.
"During the first quarter, merchandise margins increased over last
year and variable expenses were tightly managed. In addition, our
balance sheet improved with cash balances at the end of the quarter of
$220 million, up $24 million from a year ago. Inventory levels are on
plan, up 11.6% and approximately the same as our square footage growth
over the past year. In the first quarter, we repurchased 1.2 million
shares of Pier 1 stock at a cost of $20.5 million. We will continue
our buyback strategy, with $133.5 million remaining in our share
repurchase program.
"For the fiscal year, we are reiterating diluted earnings per
share in the range of $1.45 to $1.50, and comparable store sales for
the year are estimated to be between +1% and +3%. Projections for the
second quarter remain cautious due to continuing uncertainties and
tough sales comparisons to last year. Based on comparable store sales
estimates for the second quarter of -2% to +2%, we now project diluted
earnings per share in the range of $0.21 to $0.25 per share.
"As we look ahead to the remainder of the year, the new tax bill
that provides rebates as well as changes in overall tax rates will
result in higher take-home pay for families. We believe this is a
positive for Pier 1 and Cargokids stores as we begin our annual
Back-to-School selling season in July. Barring any major unforeseen
circumstances, we anticipate a slow but steady economic recovery over
the next six to nine months with consumer sentiment and spending
showing encouraging signs.
"Pier 1's value pricing, unique merchandise offerings and superior
customer service all provide positive influences on our customers.
During the weekend of June 21st, our spring clearance event begins
with 'The One Big Sale,' supported for the first time by a 4-page
newspaper insert. It continues through July 26th, and we believe this
event should be very successful."
The Company will host a conference call to discuss fiscal 2004
first quarter earnings at 10:00 a.m. Central Time today. A web cast is
available to all investors 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 1143193. 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 Company will hold its annual shareholders meeting at 10:00
a.m. local time on June 26, 2003, at the Renaissance Worthington
Hotel, Brazos Room, 200 Main Street, Fort Worth, Texas.
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-K
for fiscal year 2003. 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) stores in six
states.
(Financial Tables Follow)
Pier 1 Imports, Inc.
--------------------
COMPARATIVE OPERATING RESULTS
FOR THE THREE MONTHS ENDED
MAY 31, 2003 AND JUNE 1, 2002
(in thousands except per share amounts)
(unaudited)
Three Months Ended
May 31, June 1,
2003 2002
-------------------- ------------------
Net Sales $402,712 $384,429
=============== ==================
Net Income $19,062 $22,181
=============== ==================
Earnings Per Share:
Basic $0.21 $0.24
=============== ==================
Diluted $0.21 $0.23
=============== ==================
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share
amounts)
(unaudited)
Three Months Ended
May 31, June 1,
2003 2002
------------ -------------
Net sales $402,712 $384,429
Operating costs and expenses:
Cost of sales (including buying and
store occupancy costs) 234,515 220,436
Selling, general and administrative
expenses 125,778 118,333
Depreciation and amortization 12,161 10,731
--------------- ----------------
372,454 349,500
--------------- ----------------
Operating income 30,258 34,929
Nonoperating (income) and expenses:
Interest and investment income (637) (837)
Interest expense 637 558
--------------- ----------------
- (279)
--------------- ----------------
Income before income taxes 30,258 35,208
Provision for income taxes 11,196 13,027
--------------- ----------------
Net income $19,062 $22,181
=============== ================
Earnings per share:
Basic $0.21 $0.24
=============== ================
Diluted $0.21 $0.23
=============== ================
Average shares outstanding during
period:
Basic 90,145 93,708
=============== ================
Diluted 92,198 96,613
=============== ================
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
May 31, March 1, June 1,
2003 2003 2002
----------- ----------- ------------
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash, including temporary
investments of $204,632,
$225,882 and $183,788,
respectively $219,679 $242,114 $195,694
Beneficial interest in
securitized receivables 42,311 40,538 40,880
Other accounts receivable, net 10,420 11,420 10,478
Inventories 338,508 333,350 303,394
Prepaid expenses and other
current assets 44,702 36,179 46,927
----------- ----------- ------------
Total current assets 655,620 663,601 597,373
Properties, net 230,165 254,503 224,295
Other noncurrent assets 50,203 49,383 47,162
----------- ----------- ------------
$935,988 $967,487 $868,830
=========== =========== ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term
debt $6,000 $393 $728
Accounts payable 79,451 76,742 83,305
Gift cards, gift certificates
and merchandise credits
outstanding 38,446 37,924 30,418
Accrued income taxes payable 7,141 25,798 13,803
Other accrued liabilities 86,313 102,732 66,069
----------- ----------- ------------
Total current liabilities 217,351 243,589 194,323
Long-term debt 19,000 25,000 25,000
Other noncurrent liabilities 57,044 54,962 44,346
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 144,262 144,247 143,800
Retained earnings 553,434 539,776 447,379
Cumulative other comprehensive
income (loss) (278) (2,210) (3,483)
Less -- 10,955,000, 10,045,000
and 7,046,000 common
shares in treasury, at
cost, respectively (155,604) (138,656) (83,314)
----------- ----------- ------------
642,593 643,936 605,161
----------- ----------- ------------
$935,988 $967,487 $868,830
=========== =========== ============
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
May 31, June 1,
2003 2002
-------------- --------------
Cash flow from operating activities:
Net income $19,062 $22,181
Adjustments to reconcile to net cash
provided by
operating activities:
Depreciation and amortization 15,247 12,460
Gain on disposal fixed assets 219 48
Deferred compensation 1,785 1,500
Tax benefit from options
exercised by employees 549 3,892
Other 1,397 574
Changes in cash from:
Inventories (5,158) (27,961)
Other accounts receivable and
other current assets (2,534) (8,797)
Accounts payable and accrued
expenses (12,962) 1,902
Accrued income taxes payable (18,657) (15,935)
Other noncurrent assets (807) (6)
Other noncurrent liabilities (500) (500)
-------------- --------------
Net cash used in operating
activities (2,359) (10,642)
-------------- --------------
Cash flow from investing activities:
Capital expenditures (17,914) (25,606)
Proceeds from disposition of
properties 23,487 380
Beneficial interest in securitized
receivables (2,373) 3,740
-------------- --------------
Net cash provided by (used
in) investing activities 3,200 (21,486)
-------------- --------------
Cash flow from financing activities:
Cash dividends (5,404) (4,712)
Purchases of treasury stock (20,490) (12,657)
Proceeds from stock options exercised,
stock purchase plan and other, net 3,008 9,582
Repayments of long-term debt (390) -
-------------- --------------
Net cash used in financing
activities (23,276) (7,787)
-------------- --------------
Change in cash and cash equivalents (22,435) (39,915)
Cash and cash equivalents at beginning
of period 242,114 235,609
-------------- --------------
Cash and cash equivalents at end of
period $219,679 $195,694
============== ==============
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817/252-8400