Exhibit 99.1
Pier 1 Imports Reports Fiscal 2006 First Quarter Results
and Guidance for Second Quarter
FORT WORTH, Texas--(BUSINESS WIRE)--June 14, 2005--Pier 1 Imports,
Inc. (NYSE:PIR) today reported a net loss of $12,462,000, or $0.14 per
share, for the first quarter ended May 28, 2005. Total sales declined
6.1% for the first fiscal quarter to $405,709,000, from $432,027,000
in the year-ago quarter, and comparable store sales declined 12.0%.
Marvin J. Girouard, the Company's Chairman and Chief Executive
Officer, said, "Although we began the new fiscal year with guarded
optimism on changes to the Company's marketing and merchandising
programs, we have been disappointed by slow customer response and
continued weak traffic in stores. The current promotional atmosphere
has negatively affected our sales and margins for the first quarter.
In addition, our profitability has been impacted by a shift in Pier 1
product offerings in order to make room for fresh, new merchandise.
"We continue to evaluate and assess our marketing campaign through
customer research and feedback, and we have made several changes to
emphasize a stronger selling message, thus enhancing key elements of
the campaign. In addition to our national television advertising, we
are testing different media to determine what resonates with shoppers
to increase Pier 1's customer traffic. This month our annual wicker
promotional event is followed by the clearance of spring and summer
assortments, and then stores transition into back-to-school and fall.
We also continue to bring in new merchandise each month. Our ongoing
merchandise strategy is to improve and increase the composition of new
and unique product offerings and to immediately emphasize bold new
colors that define Pier 1's style and design-position in the home
furnishings industry.
"We are seeing some incremental improvement in sales and traffic,
and we continue to closely monitor inventories. We project second
quarter comparable store sales to decline in the mid- to high-single
digit range, and given the continuing promotionally-driven sales,
gross profit is estimated to be in a range of 34.0% to 32.0%,
resulting in second quarter earnings or loss in a range of $0.03 to
($0.07) per share. Our financial guidance for second quarter sales is
dependent upon the continuation of improvement in customer traffic;
and gross profit projections are dependent upon the mix of
promotional- and regular-priced merchandise sold."
The Company will host a conference call to discuss fiscal 2006
first quarter results 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
4487698. 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 30, 2005, 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 2005. Management's expectations and assumptions
regarding planned store openings, financing of Company obligations
from operations, results from its new marketing, merchandising and
store operations strategies, 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 Ireland; and Pier 1 kids(R)
stores.
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
Three Months Ended
May 28, May 29,
2005 2004
--------- ---------
Net sales $405,709 $432,027
Operating costs and expenses:
Cost of sales (including buying and store
occupancy costs) 265,053 260,045
Selling, general and administrative expenses 146,698 139,903
Depreciation and amortization 14,627 13,538
--------- ---------
426,378 413,486
--------- ---------
Operating income (loss) (20,669) 18,541
Nonoperating (income) and expenses:
Interest and investment income (1,130) (469)
Interest expense 368 352
--------- ---------
(762) (117)
--------- ---------
Income (loss) before income taxes (19,907) 18,658
Provision (benefit) for income taxes (7,445) 6,921
--------- ---------
Net income (loss) $(12,462) $11,737
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Earnings (loss) per share:
Basic $(0.14) $0.13
========= =========
Diluted $(0.14) $0.13
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Average shares outstanding during period:
Basic 86,391 88,215
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Diluted 86,391 90,517
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Pier 1 Imports, Inc.
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CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(unaudited)
May 28, February 26, May 29,
2005 2005 2004
----------- ------------ -----------
ASSETS
Current assets:
Cash and cash equivalents,
including temporary
investments of
$95,145, $178,289 and
$144,427, respectively $105,661 $189,081 $156,026
Beneficial interest in
securitized receivables 35,992 35,690 47,749
Other accounts receivable, net 14,573 11,744 11,929
Inventories 421,480 380,730 384,179
Prepaid expenses and other
current assets 61,761 43,445 42,538
----------- ------------ -----------
Total current assets 639,467 660,690 642,421
Properties, net 335,310 337,630 302,766
Other noncurrent assets 77,189 77,429 63,132
----------- ------------ -----------
$1,051,966 $1,075,749 $1,008,319
=========== ============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $114,327 $113,502 $96,004
Gift cards and other deferred
revenue 58,733 61,347 53,081
Accrued income taxes payable 4,734 11,866 2,895
Other accrued liabilities 108,367 102,294 91,891
----------- ------------ -----------
Total current liabilities 286,161 289,009 243,871
Long-term debt 19,000 19,000 19,000
Other noncurrent liabilities 106,825 103,371 71,889
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 141,615 141,850 145,596
Retained earnings 635,614 656,692 633,931
Cumulative other comprehensive
(loss) income (2,283) (1,426) 501
Less -- 14,596,000, 14,459,000
and 13,017,000 common shares
in treasury, at cost,
respectively (235,745) (233,526) (207,248)
----------- ------------ -----------
639,980 664,369 673,559
----------- ------------ -----------
$1,051,966 $1,075,749 $1,008,319
=========== ============ ===========
Pier 1 Imports, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
May 28, May 29,
2005 2004
--------- ---------
Cash flow from operating activities:
Net income (loss) $(12,462) $11,737
Adjustments to reconcile to net cash used in
operating activities:
Depreciation and amortization 18,478 17,399
Loss on disposal of fixed assets 16 63
Deferred compensation 1,901 1,939
Lease termination expense 156 609
Tax benefit from options exercised by
employees 135 446
Other 18 (773)
Changes in cash from:
Inventories (40,750) (10,309)
Other accounts receivable, prepaid expenses
and other current assets (7,422) (2,483)
Accounts payable and accrued expenses 5,472 (12,720)
Accrued income taxes payable (23,509) (23,087)
Other noncurrent assets 7 (22)
--------- ---------
Net cash used in operating activities (57,960) (17,201)
--------- ---------
Cash flow from investing activities:
Capital expenditures (13,972) (27,363)
Proceeds from disposition of properties 19 44
Beneficial interest in securitized receivables (302) (3,418)
--------- ---------
Net cash used in investing activities (14,255) (30,737)
--------- ---------
Cash flow from financing activities:
Cash dividends (8,616) (8,803)
Purchases of treasury stock (4,047) (14,596)
Proceeds from stock options exercised,
stock purchase plan and other, net 1,458 2,262
--------- ---------
Net cash used in financing activities (11,205) (21,137)
--------- ---------
Change in cash and cash equivalents (83,420) (69,075)
Cash and cash equivalents at beginning of period 189,081 225,101
--------- ---------
Cash and cash equivalents at end of period $105,661 $156,026
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CONTACT: Pier 1 Imports, Inc., Fort Worth
Cary Turner, 817-252-8400