Pier 1 sees first 1Q operating income in 6 year and posts surprise profit

Pier 1 posts surprise 1Q profit; store traffic up

FORT WORTH, Texas — Home decor retailer Pier 1 Imports Inc. said Thursday its first-quarter net income dropped nearly 74 percent compared to last year, when results were boosted by repurchase of debt and money from a lawsuit.

But Wall Street expected a loss and it was the first time in six years the company reported operating income during the first quarter of the year.

“We experienced strong performance in all merchandise divisions and all areas of the country,” said Alex W. Smith, president and CEO. “Our confidence level is high and we know how to keep the momentum going.”

Revenue rose and a key metric, same-store sales, soared as people bought more of the company’s home wares and other products.

Pier 1 reported a profit of $7.7 million, or 7 cents per share in the three month period ending May 29. That compared with net income of $29.3 million, or 32 cents per share, a year ago. Last year’s first quarter included a $47.8 million gain on the repurchase of debt and $10 million from litigation.

Revenue rose 9 percent to $306.3 million.

According to Thomson Reuters, analysts expected a loss of 2 cents a share and $306.1 million in revenue.

Revenue at stores open at least a year — a key figure for retailers — grew 14.3 percent in the quarter, compared to a drop of 7.5 percent last year. That’s an important metric because it measures growth at existing businesses rather than including new ones.

Smith said traffic and the average amount spent by customers all increased during the quarter, and all merchandise divisions saw gains across the country.