Pier 1 Imports (PIR) Q1 2013 Earnings Call June 14, 2012 11:00 am ET Executives Kelley Buchhorn Alexander W. Smith - Chief Executive Officer, President, Director and Member of Executive Committee Charles H. Turner - Chief Financial Officer, Senior Executive Vice President and Treasurer Analysts John Marrin - Jefferies & Company, Inc., Research Division Brian W. Nagel - Oppenheimer & Co. Inc., Research Division David Berman - Berman Capital Management LP Helen Pan - Barclays Capital, Research Division Simeon Gutman - Crédit Suisse AG, Research Division Bradley B. Thomas - KeyBanc Capital Markets Inc., Research Division Matthew R. Nemer - Wells Fargo Securities, LLC, Research Division Anthony C. Chukumba - BB&T Capital Markets, Research Division Denise Chai - BofA Merrill Lynch, Research Division Presentation Operator
If you do not have a copy of today's press release, you may obtain one, along with copies of prior press releases and all SEC filings, by linking through to the Investor Relations page of our website, pier1.com.Now I'd like to turn the call over to Alex Smith, our President and Chief Executive Officer. Alex? Alexander W. Smith Thanks, Kelley. Good morning, everyone, and thanks for joining us today. Also on the call with us is Cary Turner, our Senior Executive Vice President and Chief Financial Officer. Cary will, of course, provide a detailed review of our first quarter financial results in just a few minutes. We are very pleased to begin the new fiscal year with another quarter of strong financial performance. In fact, this is our 11th consecutive quarter of comp store sales and profitability gains. Total sales were up 7.9% to $361 million while comp store sales rose 7.2%, reflecting strength throughout all of our merchandise categories and across all geographic regions. Customers responded well to our outdoor spring and Easter assortments during the early spring month of March and April. In May, our biggest month of the quarter, we achieved strong sales gains surrounding Mother's Day and the Memorial Day weekends, both benefiting from our creative marketing campaigns and an optimal level of promotional offerings. In the first quarter, we delivered strong gross profit and merchandise margins, drove further improvements in operating margin and posted a 33% increase in earnings per share. At the same time, we returned value to shareholders through share repurchases under our buyback program and our quarterly cash dividend. Our investments in marketing are certainly helping our business with a media strategy that utilizes creative communication to strengthen our brand positioning and drive traffic. We finesse in realtime our media budget in order to maximize overall customer reach, shifting more of our investments into those vehicles that are driving a higher customer response rate. We had great success with our television campaigns and have plans for this year for national cable television in nearly every month.
For the launch of Pier 1 To-You nearing, we will increase the level of our paid search in digital media, increase the awareness of pier1.com and, more importantly, drive traffic to our sites. Subsequent to the launch of the new pier1.com, we will up the weight of our digital media program more significantly starting early this fall.You'll remember that in April we announced our new 3-year growth plan designed to drive profitable top line growth, expand our market share and increase shareholder value. Here's an update on some of the key components of the plan. First and foremost, we are fully prepared to execute the soft launch of our new e-Commerce-enabled website. The launch date is July 28. We have fully redesigned the look, feel and functionality of our site, which will be unveiled in conjunction with the launch of Pier 1 To-You. Excitement and anticipation is, as you may imagine, building throughout the whole organization as the launch date approaches. Our operational teams are in testing, training and implementation phases and we are building and training new customer relations teams specifically to support our e-Commerce business. The buildout of our fulfillment space is complete. We've begun to receive inventory and we're running capacity and final systems testing. Importantly, our current online trends remain strong with increases in both the number of unique visitors and time spent on the site. Our current initiative Pier 1 To-Go continues to account for about 1% of our comp store sales increases. Read the rest of this transcript for free on seekingalpha.com