Originally created 06/16/04

Pier 1 profit plunges on weak sales



FORT WORTH, Texas - Pier 1 Imports Inc.'s profit for its latest quarter plummeted 38 percent, as less effective advertising and inconsistent store performance hurt customer traffic and sales.

The Fort Worth-based home-furnishings chain also issued an earnings outlook that was below Wall Street expectations.

Pier 1 reported net income of $11.7 million, or 13 cents a share, for the first quarter ended May 29, matching the average forecast of analysts surveyed by Thomson First Call. In the same period a year ago, Pier 1 earned $19.1 million, or 21 cents a share.

Earlier this month, Pier 1 lowered its quarterly earnings estimate to a range of 12 cents to 14 cents a share, prompted by a decline in its May sales at stores open at least a year, also known as same-store sales.

Previously, the chain had cut its first-quarter earnings estimate to between 14 cents and 17 cents a share.

Sales rose 7.3 percent to $432 million from $402.7 million, but same-store sales fell 1.8 percent.

Pier 1 said it expects fiscal second-quarter earnings between 12 cents and 14 cents a share. That would be below analysts' average estimate of 16 cents a share, according to a survey by Thomson First Call. Pier 1 also projects a same-store sales drop between 2 percent and 4 percent.

Chairman and Chief Executive Marvin J. Girouard said in a statement that Pier 1 is "developing strategies" to gain market share.

In last year's second quarter, the company posted earnings of 20 cents a share.

Shares of Pier 1 rose 21 cents, or 1.2 percent, to $17.17 in early Tuesday trading on the New York Stock Exchange.