Exhibit 99.1
Pier 1 Imports Reports Fiscal 2005 First Quarter Earnings;
Provides Sales and Earnings Guidance for Second Quarter
FORT WORTH, Texas--(BUSINESS WIRE)--June 15, 2004--Pier 1 Imports,
Inc. (NYSE:PIR) today reported diluted earnings per share of $0.13 for
the first quarter ended May 29, 2004, compared to $0.21 per diluted
share for the year-ago period. Sales for the first quarter were
$432,027,000, a 7.3% increase over last year's $402,712,000, and first
fiscal quarter comparable store sales declined 1.8%. Net income was
$11,737,000, compared to last year's net income of $19,062,000.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, commented, "Even though the first quarter started out
positive, sales slowed after the Easter holiday and remained weak. We
were disappointed with our performance for the quarter. After
identifying several reasons for Pier 1's soft sales and traffic,
including less effective advertising, merchandising issues, and
inconsistent store performance in certain areas of the country, we are
developing strategies, both near- and longer-term, designed to drive
customer traffic, increase conversion rates and gain market share.
"June's Wicker Seating Sale began last weekend and a new Thom
Filicia television commercial begins airing in July. The 4th of July
holiday weekend sales will primarily benefit the fiscal month of July,
as will the summer clearance that starts with our 'One Big Sale'
newspaper insert the first weekend of the month. Additionally, we
anticipate positive customer response from the new transitional
assortment of back-to-college merchandise.
"As we come off the disappointing first quarter and begin the
second quarter of the fiscal year, we continue to manage the Company's
cash from operations, control expenses and prudently buy back our
stock. We will continue to react quickly as the business changes and
remain committed to achieving higher sales and profitability, while
increasing shareholder value."
Diluted earnings per share for the second quarter are projected to
be in a range of $0.12 to $0.14 per share, based on the following
projections:
-- Second quarter comparable store sales in a range of -2% to
-4%,
-- Second quarter merchandise margins in a range of 53.4% to
53.7% versus 53.9% last year, due to a higher percentage of
promotional sales,
-- As a percentage of sales, second quarter fixed store occupancy
costs combined with merchandise margins resulting in gross
profit in a range of 37.5% to 38.1% versus 39.5% last year,
and
-- De-leveraging of selling, general and administrative expenses,
as a percent of sales, in a range of 30.5% to 30.8% for the
second quarter, versus 29.9% in the year-ago period.
The Company will host a conference call to discuss fiscal 2005
first quarter earnings and second quarter projections at 10:00 a.m.
Central Time today. A web cast is available on our web site 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
5456657. 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. Central Time on June 25, 2004, in the Trinity Room of the Fort
Worth Club, 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 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 primarily in the United Kingdom; and Cargokids(R)
stores.
Pier 1 Imports, Inc.
--------------------
COMPARATIVE OPERATING RESULTS
FOR THE THREE MONTHS ENDED
MAY 29, 2004 AND MAY 31, 2003
(in thousands except per share amounts)
(unaudited)
Three Months Ended
May 29, May 31,
2004 2003
------------ ------------
Net Sales $432,027 $402,712
============ ============
Net Income $11,737 $19,062
============ ============
Earnings Per Share:
Basic $0.13 $0.21
============ ============
Diluted $0.13 $0.21
============ ============
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended
May 29, May 31,
2004 2003
------------ ------------
Net sales $432,027 $402,712
Operating costs and expenses:
Cost of sales (including buying and store
occupancy costs) 260,045 234,515
Selling, general and administrative
expenses 139,903 125,778
Depreciation and amortization 13,538 12,161
------------ ------------
413,486 372,454
------------ ------------
Operating income 18,541 30,258
Nonoperating (income) and expenses:
Interest and investment income (469) (637)
Interest expense 352 637
------------ ------------
(117) --
------------ ------------
Income before income taxes 18,658 30,258
Provision for income taxes 6,921 11,196
------------ ------------
Net income $11,737 $19,062
============ ============
Earnings per share:
Basic $0.13 $0.21
============ ============
Diluted $0.13 $0.21
============ ============
Average shares outstanding during period:
Basic 88,215 90,145
============ ============
Diluted 90,517 92,198
============ ============
Pier 1 Imports, Inc.
--------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
(unaudited)
May 29, February 28, May 31,
2004 2004 2003
----------- ------------ ----------
ASSETS
Current assets:
Cash, including temporary
investments of $144,427,
$208,984 and $204,632,
respectively $156,026 $225,101 $219,679
Beneficial interest in
securitized receivables 47,749 44,331 42,311
Other accounts receivable, net 11,929 14,226 10,420
Inventories 384,179 373,870 338,508
Prepaid expenses and other
current assets 42,538 40,623 44,702
----------- ------------ ----------
Total current assets 642,421 698,151 655,620
Properties, net 302,766 290,420 230,165
Other assets 63,132 63,602 55,968
----------- ------------ ----------
$1,008,319 $1,052,173 $941,753
=========== ============ ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term
debt $-- $-- $6,000
Accounts payable 96,004 100,640 79,451
Gift cards and other deferred
revenue 53,081 59,385 45,011
Accrued income taxes payable 2,895 25,982 7,141
Other accrued liabilities 91,891 93,881 79,748
----------- ------------ ----------
Total current liabilities 243,871 279,888 217,351
Long-term debt 19,000 19,000 19,000
Other noncurrent liabilities 71,889 69,654 62,809
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 145,596 145,384 144,262
Retained earnings 633,931 630,997 553,434
Cumulative other comprehensive
income (loss) 501 1,667 (278)
Less -- 13,016,000, 12,473,000
and 10,955,000 common shares in
treasury, at cost, respectively (207,248) (195,196) (155,604)
----------- ------------ ----------
673,559 683,631 642,593
----------- ------------ ----------
$1,008,319 $1,052,173 $941,753
=========== ============ ==========
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
May 29, May 31,
2004 2003
--------- ----------
Cash flow from operating activities:
Net income $11,737 $19,062
Adjustments to reconcile to net cash provided
by operating activities:
Depreciation and amortization 17,399 15,247
Loss on disposal of fixed assets 63 219
Deferred compensation 1,939 1,785
Lease termination expense 609 --
Tax benefit from options exercised by
employees 446 549
Other (773) 1,397
Changes in cash from:
Inventories (10,309) (5,158)
Other accounts receivable, prepaid expenses
and other current assets (2,483) (2,534)
Accounts payable and accrued expenses (12,720) (12,962)
Accrued income taxes payable (23,087) (18,657)
Other noncurrent assets (22) (807)
--------- ----------
Net cash used in operating activities (17,201) (1,859)
--------- ----------
Cash flow from investing activities:
Capital expenditures (27,363) (17,914)
Proceeds from disposition of properties 44 23,487
Net change in restricted cash -- (500)
Beneficial interest in securitized receivables (3,418) (2,373)
--------- ----------
Net cash (used in) provided by investing
activities (30,737) 2,700
--------- ----------
Cash flow from financing activities:
Cash dividends (8,803) (5,404)
Purchases of treasury stock (14,596) (20,490)
Proceeds from stock options exercised, stock
purchase plan and other, net 2,262 3,008
Repayments of long-term debt -- (390)
--------- ----------
Net cash used in financing activities (21,137) (23,276)
--------- ----------
Change in cash and cash equivalents (69,075) (22,435)
Cash and cash equivalents at beginning of period 225,101 242,114
--------- ----------
Cash and cash equivalents at end of period $156,026 $219,679
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CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400