Shares of Pier 1 Imports (PIR) fell sharply Wednesday after the home decor company slipped to a net loss in the third quarter, hurt mainly by a double-digit decline in revenues. The company also announced the appointment of Cheryl Bachelder as the interim CEO.
The Texas-based company reported a net loss of $50.4 million or $0.62 per share for the quarter, compared to a profit of $7.4 million or $0.09 per share last year. Analysts had forecast a narrower loss. The bottom-line was negatively impacted by charges related to establishing a valuation allowance against certain deferred tax assets.
At $413.2 million, sales were down 11.9% compared to the third quarter of 2018 and below the estimates. There was a 10.5% year-over-year decline in comparable store sales. At the end of the third quarter, the company operated 987 stores, lower by 24 units compared to the same period of last year.
The bottom-line was negatively impacted by charges related to setting a valuation allowance against certain deferred tax assets
The management, meanwhile, attributed the dismal earnings performance in the recent quarters to the flawed execution of its ‘New Day’ strategic plan, which is yet to yield the desired results.
Separately, Pier 1 Imports said it appointed Cheryl Bachelder as the Interim chief executive officer, to succeed Alasdair James who left the company recently. Bachelder will take over effective immediately.
As part of the efforts to enhance shareholder value, the management revealed plans to embark on an aggressive cost reduction program, which will start giving results beginning 2020. The planned capital expenditures for the fiscal year has been lowered by $20 million to $40 million.
Pier 1 Imports shares have lost 74% since the beginning of the year. The stock closed Wednesday’s regular session higher but lost more than 14% after the earnings report.