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Pier 1 Posts Strong Quarterly Results, Lifts Outlook

Despite feeling pinch on sales due to hurricane Sandy, Home furnishing retailer, Pier 1 Imports Inc. (NYSE: PIR) reported on Thursday that  fiscal third quarter earnings rose by 3 percent, thanks to a double digit revenue growth and fatter margins.

The Company also upwardly revised its outlook on full-year earnings. Pier 1 now expects earnings in the range of $ 1.17 to $ 1.21 a share, up from its earlier estimate of $ 1.10 to $ 1.16 a share. in the fourth quarter, the Company expects earnings to come in the range of 57 cents to 61 cents while analysts polled by Thomson Reuters, on average, it at 58 cents.

Pier 1 said that Board of Directors approved new $ 100 million share buyback program even as it bolstered its quarterly dividend by 25 percent to 5 cents a share.

Pier 1 Imports, which was on the verge of bankruptcy following credit-bubble burst, struggling with flagging sales and erosion of market-share to rivals such as Wal-Mart Stores and Target Corp as frugal investors in the backdrop of macroeconomic uncertainty looked for discounts and low priced products, witnessed remarkable turnaround lately, thanks to improved merchandising, remodeled stores. The changes resulted not only in higher average receipt per customer but consistent growth in same-store-sales.

In the third quarter, although most retailers’ performance was marred by the devastating storm Sandy, Pier 1 was standout case, where same-store-sales climbed, customer’s traffic increased and average billing increased.

Addressing to investors and analysts in a conference call, Pier 1 Chief Executive Alex W Smith pointed out that the recent concluded quarter marked 13th successive occasion, in which Company saw growth both in same-store-sales and earnings per share (EPS).

The latest quarter also marked Pier 1 first full quarter e-commerce sales. “ [We are pleased with the initial results as the level of both new and existing customer visits indicates the long-term opportunity is significant,” said Smith.

For the fiscal third quarter ended November 24, the company reported profit of $23.7 million, or 22 cents a share, compared to $23 million, or 21 cents a share, in the year earlier quarter.

Excluding onetime impact on sales associated with damage caused by hurricane Sandy, earnings stood at 25 cents a share.

Sales for the period climbed 11% to $424.5 million while its same-store sales for the quarter jumped 7.9%. Gross Margins widened to 43.9% from 43.2%, in the year earlier quarter.


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