Pier 1 Imports Management Discusses Q2 2013 Results - Earnings Call Transcript

In the second quarter of fiscal 2013, total sales increased 8.3%. Throughout the period, business trends grew increasingly strong as customers responded favorably to all our product categories, including outdoor and summer. By early August, our stores had transitioned to the new season, and we are set with our fabulous fall Halloween and Harvest merchandise. Early reads on these assortments have been positive. Merchandise margins remained strong, reaching 60.1% in the second quarter. We continue to carefully and thoughtfully analyze the right balance of regular promotion and clearance pricing in order to maximize merchandise margin dollars while offering our customers newness, exclusive quality merchandise and a strong value proposition.

During the quarter, we had fewer clearance markdowns compared to last year, which afforded us the opportunity to deliver more promotional pricing to our customers, whom, we all know, in this current environment, are still looking for a good deal. Our approach delivered both an improved margin rate and more merchandise margin dollars.

Let's now spend some time on what may be the single most important project in the history of our company and certainly the largest and most complex. It is, of course, our new e-Commerce-enabled, fully redesigned website, pier1.com. We are very proud of the new site, which successfully launched just over 6 weeks ago, on time and on budget. The transformation is significant and truly remarkable. We view this successful launch as a major milestone, which positions the business to grow into a true multichannel organization.

We laid out a plan 2 years ago to design and develop a best-in-class website that would be fully reflective of our brand, our stores and who we are. Our plan called for the launch of our new website in the summer of 2012. So that's what we did. And here we are, up and running after 24 months of hard work and dedication by associates throughout the organization, as well as the commitment of our external business partners.

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