Exhibit 99.1
Pier 1 Imports Reports Third Quarter Earnings
FORT WORTH, Texas--(BUSINESS WIRE)--Dec. 16, 2003--Pier 1 Imports,
Inc. (NYSE:PIR) today reported diluted earnings per share of $0.35 for
the third quarter ended November 29, 2003, compared to $0.33 per
diluted share for the year-ago period, in line with the Company's
December 4th guidance. Net income was $32,194,000, compared to last
year's net income of $31,100,000. Sales for the third quarter were
$482,444,000, a 10.0% increase over last year's $438,501,000, and
third quarter comparable store sales increased by 1.6%.
For the nine months ended November 29, 2003, diluted earnings per
share amounted to $0.76, compared to $0.79 per diluted share for the
year-ago period. Net income for the nine months was $69,692,000,
compared to last year's $75,354,000. Sales for the nine months of
fiscal 2004 amounted to $1,312,987,000, up 6.4% from $1,233,832,000
for the year-ago period. Comparable store sales declined 2.0% for the
nine-month period that ended November 29, 2003.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "We were pleased to report a total sales increase of
10% over the prior year's quarter, with a positive comparable store
gain during the period. We opened 55 new Pier 1 stores, and relocated
or closed 13 stores, opened 9 net new Cargokids stores and ended the
third quarter with 1,166 stores worldwide. Merchandise margins as a
percentage of sales were even with last year and selling, general and
administrative expenses were well controlled.
"We continue to improve our strong balance sheet by managing
working capital and increasing operating cash flow, while accelerating
store openings and buying back our common stock. Cash at the end of
the third quarter was $178.7 million, up $28.0 million from last
year's third quarter cash balances of $150.7 million. In the third
quarter, we repurchased 450,000 shares of Pier 1 stock at a cost of
$10.7 million. Through the first nine months of fiscal 2004 that ended
November 29, 2003, we repurchased 2.7 million shares of Pier 1 stock
at a cost of $52.3 million, with $101.7 million remaining in our share
repurchase program.
"Looking forward, sales continue to build each week in December
and we still have over 50% of the month's business ahead of us.
However, so far this month traffic has been weak throughout the
country, and has been further impacted by snowstorms in the Midwest,
Mid-Atlantic and Northeastern regions. As a result, sales have not
been as strong as expected and comparable store sales for December are
now projected to be in a range of -4% to -8%. Fourth quarter
comparable store sales are projected to be in a range of flat to -5%,
while fourth quarter diluted earnings per share are now projected to
be in a range of $0.52 to $0.58, compared to $0.57 last year. Diluted
earnings for the fiscal year ending February 28, 2004 are expected to
be in a range of $1.28 to $1.34 per share, compared to $1.36 diluted
earnings per share a year ago. We will update our fourth quarter
guidance when we announce December sales on January 8, 2004."
The Company will host a conference call to discuss fiscal 2004
third 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
"Investor Relations" page and the "Events" page, or you can dial into
the conference at 706-643-0435, ID number 2419537. The teleconference
will be held in a "listen-only" mode for all participants other than
the Company's current sell-side analysts and buy-side investors. 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 2419537.
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).
Pier 1 Imports, Inc.
--------------------
COMPARATIVE OPERATING RESULTS
FOR THE THREE AND NINE MONTHS ENDED
NOVEMBER 29, 2003 AND NOVEMBER 30, 2002
(in thousands except per share amounts)
Three Months Ended Nine Months Ended
November November November November
29, 30, 29, 30,
2003 2002 2003 2002
--------- --------- ----------- -----------
Net Sales $482,444 $438,501 $1,312,987 $1,233,832
========= ========= =========== ===========
Net Income $32,194 $31,100 $69,692 $75,354
========= ========= =========== ===========
Earnings Per Share
Basic $0.36 $0.34 $0.78 $0.81
========= ========= =========== ===========
Diluted $0.35 $0.33 $0.76 $0.79
========= ========= =========== ===========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
Nov. 29, Nov. 30, Nov. 29, Nov. 30,
2003 2002 2003 2002
--------- --------- ----------- -----------
Net sales $482,444 $438,501 $1,312,987 $1,233,832
Operating costs and
expenses:
Cost of sales
(including buying and
store occupancy costs) 274,346 246,741 767,580 713,150
Selling, general and
administrative
expenses 143,997 130,156 397,500 367,101
Depreciation and
amortization 13,140 12,305 37,564 34,365
--------- --------- ----------- -----------
431,483 389,202 1,202,644 1,114,616
--------- --------- ----------- -----------
Operating income 50,961 49,299 110,343 119,216
Nonoperating (income) and
expenses:
Interest and investment
income (462) (627) (1,623) (2,163)
Interest expense 322 566 1,344 1,769
--------- --------- ----------- -----------
(140) (61) (279) (394)
--------- --------- ----------- -----------
Income before income
taxes 51,101 49,360 110,622 119,610
Provision for income taxes 18,907 18,260 40,930 44,256
--------- --------- ----------- -----------
Net income $32,194 $31,100 $69,692 $75,354
========= ========= =========== ===========
Earnings per share:
Basic $0.36 $0.34 $0.78 $0.81
========= ========= =========== ===========
Diluted $0.35 $0.33 $0.76 $0.79
========= ========= =========== ===========
Average shares outstanding
during period:
Basic 89,005 92,536 89,520 93,092
========= ========= =========== ===========
Diluted 91,588 94,810 91,803 95,631
========= ========= =========== ===========
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
(unaudited)
November March November
29, 1, 30,
2003 2003 2002
----------- --------- ---------
ASSETS
Current assets:
Cash, including temporary
investments of $164,136, $225,882
and $133,902, respectively $178,731 $242,114 $150,716
Beneficial interest in securitized
receivables 51,237 40,538 49,662
Other accounts receivable, net 20,243 11,420 20,494
Inventories 404,152 333,350 382,180
Prepaid expenses and other current
assets 38,158 36,179 41,616
----------- --------- ---------
Total current assets 692,521 663,601 644,668
Properties, net 272,262 254,503 246,786
Other noncurrent assets 48,310 49,383 46,727
----------- --------- ---------
$1,013,093 $967,487 $938,181
=========== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt
and notes payable $6,000 $393 $390
Accounts payable 100,153 76,742 86,465
Gift cards, gift certificates and
merchandise credits outstanding 40,486 37,924 32,509
Accrued income taxes payable 14,591 25,798 25,402
Other accrued liabilities 108,943 102,732 88,485
----------- --------- ---------
Total current liabilities 270,173 243,589 233,251
Long-term debt 19,000 25,000 25,000
Other noncurrent liabilities 60,518 54,962 48,941
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 145,126 144,247 143,977
Retained earnings 589,785 539,776 491,269
Cumulative other comprehensive
income 1,603 (2,210) (2,380)
Less -- 11,559,000, 10,045,000 and
7,959,000 common shares in
treasury, at cost, respectively (173,891) (138,656) (102,656)
663,402 643,936 630,989
----------- --------- ---------
$1,013,093 $967,487 $938,181
=========== ========= =========
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
November November
29, 30,
2003 2002
--------- ---------
Cash flow from operating activities:
Net income $69,692 $75,354
Adjustments to reconcile to net cash provided by
operating activities:
Depreciation and amortization 48,268 42,595
(Gain) loss on disposal of fixed assets (552) 477
Deferred compensation 6,637 4,172
Tax benefit from options exercised by
employees 4,355 6,364
Other 5,226 830
Changes in cash from:
Inventories (70,802) (106,747)
Other accounts receivable, prepaid expenses
and other current assets (18,477) (17,912)
Accounts payable and accrued expenses 30,056 31,947
Accrued income taxes payable (11,207) (4,336)
Other noncurrent assets (754) (405)
Other noncurrent liabilities (500) (500)
--------- ---------
Net cash provided by operating
activities 61,942 31,839
--------- ---------
Cash flow from investing activities:
Capital expenditures (87,904) (73,062)
Proceeds from disposition of properties 33,953 667
Beneficial interest in securitized receivables (12,049) (5,042)
--------- ---------
Net cash used in investing activities (66,000) (77,437)
--------- ---------
Cash flow from financing activities:
Cash dividends (19,683) (13,995)
Purchases of treasury stock (52,292) (40,161)
Proceeds from stock options exercised, stock
purchase plan and other, net 13,040 15,225
Repayments of notes payable (390) (364)
--------- ---------
Net cash used in financing activities (59,325) (39,295)
--------- ---------
Change in cash and cash equivalents (63,383) (84,893)
Cash and cash equivalents at beginning of period 242,114 235,609
--------- ---------
Cash and cash equivalents at end of period $178,731 $150,716
========= =========
CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400