Why Pier 1 Imports (PIR) Stock Is Up in Pre-Market Activity Today

NEW YORK (TheStreet) -- Pier 1 Imports  (PIR) rose in pre-market activity on Thursday after the home furnishings retailer reported fourth-quarter earnings that beat analysts' expectations.

The company reported adjusted earnings per share of 60 cents, which beat the Capital IQ consensus estimate of 43 cents. Revenue declined 6.5% year over year to $515.8 million, but this still surpassed the estimate of $512.65 million. Comparable-store sales rose 2.4%, while gross profit was $745.6 million, or 42.1% of sales.  

For the upcoming fiscal year, Pier 1 forecasts guidance of $1.16 to $1.24 a share, in line with the consensus estimate of $1.24 a share. The company also expects comparable-store sales growth in the mid single-digits.

The stock was up 1.54% to $18.50 in pre-market activity on Thursday.

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Separately, TheStreet Ratings team rates PIER 1 IMPORTS INC/DE as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate PIER 1 IMPORTS INC/DE (PIR) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 150.51% to $71.60 million when compared to the same quarter last year. In addition, PIER 1 IMPORTS INC/DE has also vastly surpassed the industry average cash flow growth rate of -9.26%.
  • The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 13.0% when compared to the same quarter one year prior, going from $23.68 million to $26.76 million.
  • PIR's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that PIR's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • You can view the full analysis from the report here: PIR Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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