Pier 1 Imports, Inc. Reports Second Quarter Fiscal 2020 Financial Results

•Company comparable sales decreased 12.6% compared to the second quarter of fiscal 2019;
•Net sales decreased 14.3% to $304.6 million compared to the second quarter of fiscal 2019;
•Net loss of $100.6 million, or ($24.29) per share;
•li>Inventory of $328.6 million, down approximately 15% year-over-year; and
•Cash and cash equivalents of $10.0 million at quarter end, $190.0 million outstanding under its senior secured term loan, $50 million of borrowings under the Company’s FILO tranche and $55 million of borrowings under its $350 million revolving credit facility.

Cheryl Bachelder, Interim CEO, stated, “As we expected, sales and margins remained under pressure in the second quarter. We exited non-go-forward products through aggressive clearance actions, which was the primary driver of our net loss in the quarter. However, the strategic decision to clear through goods paved the way for our merchandise and marketing reset this fall. Fresh assortments began flowing into stores during the final weeks of the quarter and as we move closer to holiday, we look forward to delivering more of the unique, on-trend seasonal goods the Pier 1 brand is known for.”

Ms. Bachelder concluded, “The organization continues to make progress against our fiscal 2020 action plan, and we remain on track to achieve benefits of $100-$110 million this year, as previously outlined. While we anticipate that our merchandising and marketing initiatives will start to gain traction during the second half, we expect a gradual recovery and believe we’ll be positioned to demonstrate year-over-year improvement in company comparable sales and gross margin rate beginning in the fourth quarter. Our teams are working diligently to turn the business around and we believe that Pier 1 can prosper once again.”

Second Quarter Fiscal 2020 Results of Operations
Net sales for the second quarter of fiscal 2020 decreased 14.3% to $304.6 million, compared to $355.3 million for the second quarter of fiscal 2019. Company comparable sales decreased 12.6% compared to the year ago period, reflecting lower average customer spend, which is primarily attributable to changes in the Company’s merchandise mix, as well as decreased store traffic. The Company operated 951 stores at the end of the second quarter, a decrease of 38 from the second quarter of fiscal 2019.

Gross profit for the second quarter of fiscal 2020 totaled $50.8 million, or 16.7% of net sales, compared to $93.5 million, or 26.3% of net sales, for the second quarter of fiscal 2019. The year-over-year decline in gross margin rate primarily reflects increased clearance activity, as well as 240 basis points of deleverage on occupancy costs.

Operating loss for the second quarter of fiscal 2020 was $93.1 million compared to operating loss of $62.5 million for the prior year period. Net loss for the second quarter of fiscal 2020 totaled $100.6 million, or ($24.29) per share, which includes transformation costs of approximately $7 million, primarily related to professional fees, and a non-cash charge of $4.3 million related to store impairment. This compares to net loss of $51.1 million, or ($12.68) per share a year ago. Per share data has been adjusted to reflect the Company’s 1-for-20 reverse stock split effected on June 20, 2019. EBITDA in the second quarter of fiscal 2020 was ($80.9) million, which includes the transformation costs and impairment charge referred to above, compared to EBITDA of ($49.3) million in the second quarter of fiscal 2019. A reconciliation of this non-GAAP measure to GAAP is provided below.

Year-to-Date Results of Operations
Net sales for the 26 weeks ended August 31, 2019 were $618.9 million, a decrease of 14.9% compared to $727.2 million for the same period of fiscal 2019. Company comparable sales for the year-to-date period decreased 13.1% from the prior year, reflecting lower average customer spend, which is primarily attributable to changes in the Company’s merchandise mix, as well as decreased store traffic.

Gross profit for the year-to-date period of fiscal 2020 totaled $129.7 million, or 20.9% of net sales, compared to $213.6 million, or 29.4% of net sales, for the same period a year ago.

For the 26-week period ended August 31, 2019, operating loss was $169.6 million compared to operating loss of $93.8 million in the same period a year ago. Net loss for the 26 weeks ended August 31, 2019 totaled $182.3 million, or ($44.28) per share, which includes transformation costs of approximately $26 million, primarily related to professional fees, and a non-cash charge of $4.6 million related to store impairment. This compares to net loss of $79.6 million, or ($19.80) per share, in the year ago period. Per share data has been adjusted to reflect the Company’s 1-for-20 reverse stock split effected on June 20, 2019. EBITDA for the 26-week period was ($145.1) million in fiscal 2020, which includes the transformation costs and impairment charge referred to above, compared to EBITDA of ($68.1) million in fiscal 2019.
more detail at: https://investors.pier1.com/news-releases/news-release-details/pier-1-imports-inc-reports-second-quarter-fiscal-2020-financial

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