Pier 1 Imports (PIR) reported its second quarter results after the market closed. Pier 1 stock dipped about 3% as it missed analysts’ estimates on the sales front. Comp-store sales dropped 11.4% as the retailer is undergoing a planned transition which is expected to yield results in the next couple of years.
The adjusted loss came in at $0.63 per share compared to $0.05 loss per share reported last year. Sales decreased 12.8% to $355.3 million, which fell short of estimates by about $5 million. The company has attributed the disappointing second quarter numbers to the ongoing rebranding and marketing efforts which are taking longer-than-expected to bear fruit. As a result, Pier 1 also has decided not to provide the outlook for its current fiscal year.
In April, the home furnishing retailer decided to stop dividend payouts so that it can utilize the money to invest in the planned transition. This decision hasn’t gone well with the investors sending the stock down 20% post the announcement. The company unveiled “Pier 1 2021: A New Day” transition plan, which is a three-year plan to drive sales and profit growth in 2020 and 2021.
The company was able to reduce inventory by 15.4% over last year. Pier 1 operates 989 stores, down 23 stores compared to the prior year period.
Similar to other retailers. Pier 1 is facing tough competition from the e-commerce giants Walmart (WMT) and Amazon (AMZN), from its peers like Target (TGT) and other specialty home furnishing retailers. As the consumer shopping trends evolve, it is inevitable for Pier 1 to revamp its entire strategy to tackle competition and cater to the evolving retail landscape.
Last month, Pier 1 inducted Allie Kline into the board. Kline has been taking care of marketing for Oath, a subsidiary of Verizon (VZ). She also comes with more than two decades of experience, especially on the branding and digital marketing front, which is expected to help the retailer bring back its loyal customers to improve top and bottom lines.
Shares of Pier 1 have plummeted more than 60% in 2018 and lost above 65% in the last 12 months.