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Pier 1 Imports Plunges on Poor December Sales

Stocks in this article: PIR

NEW YORK (TheStreet) -- Pier 1 Imports (PIR) plunged more than 12% on Thursday after the company blamed the "wintry weather" as the reason why sales were down 5.7% in December, its biggest selling month of the year.

The Fort Worth, Texas-based company said that comparable store sales for the five-week period ended Jan. 4 rose 1.3% from last year, but that positive number is a result of a shift in the 2013 calendar that added an extra week. Excluding that adjustment, Pier 1 said sales for December actually fell 5.7% compared with a rise of 8.2% a year earlier.

Pier 1 shares were sagging 12.3% to $20.44 on Thursday.

PIR ChartPIR data by YCharts

"We're extremely disappointed that December sales results came in well below our expectations, especially considering our holiday selling season kicked off with a record post-Thanksgiving weekend," CEO Alex Smith said in a statement on Thursday. "The disruption caused by wintry weather in the first half of December, which we discussed on our third quarter earnings call, continued to impact us throughout the balance of the month and into January."

"Store traffic in key markets was significantly affected by adverse weather in fiscal December, with the majority of the days concerned falling on our all-important weekends," Smith added. "Our holiday assortments were excellent and our execution both in-store and online was first class - making it all the more upsetting to have our results impacted by forces beyond our control. A strong balance of regular and promotional pricing, together with our customer engagement strategies, drove increased conversion and average ticket during the month, making the best of soft store traffic."

The company said stores in warmer weather locales, namely the Southeast, the Southwest and California, saw mid-single digit comparable-sales growth.

Smith also said that Web site traffic and sales conversion saw new monthly highs in December, averaging 2.2 million visitors per week in December.

Pier 1 issued fourth-quarter guidance. It expects sales growth in the low- to mid-single digits, yet comparable sales are expected to be flat for the quarter.

Not surprisingly it tempered earnings expectations to a range of 47 cents to 52 cents a share, down from previous guidance of 60 cents to 66 cents a share.

The company also said it expects full-year sales growth in the mid-to-high single digit range, comps of low-to-mid single digits and EPS between $1.07 and $1.12 a share, down from a range of $1.21 to $1.27.

"As frustrating as these results are for all of us, they have no bearing on the execution of our longer-term strategy," Smith said. "We remain confident that the opportunity for growth in both our Pier 1 Imports stores and e-commerce business is significant."

-- Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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