Pier 1 seeks multi-channel dominance
FORT WORTH, Texas — Bed Bath and Beyond may dominate the housewares retail space, but that isn't stopping companies like Pier 1 Imports from trying to take a bigger share. In that vein, Pier 1 announced a new three-year growth plan commencing in fiscal 2013, as well as updated financial goals. According to the company, the new board-approved plan is designed to drive profitable top and bottom-line growth, expand market share and increase shareholder value as the company evolves into a multi-channel retailer.
Alex Smith, president and CEO, commented, “We are excited to unveil our new three-year growth plan, which reflects our commitment to increase shareholder value through initiatives and growth strategies designed to further improve sales and profitability. I am pleased to note that we accomplished a great deal in the first year under our original plan, which we unveiled in April 2011. In fiscal 2012, we made substantial improvements to our existing store base, opened 15 new locations, enhanced our planning and allocation systems, repurchased 8% of our common stock and importantly – we’re well underway with the development of our e-commerce platform that will support our evolution into a multi-channel retailer as we prepare for the launch of ‘Pier 1 To-You’ this summer. We also surpassed our three-year goal to achieve operating margins of 10%, reporting full-year operating profit of $155 million, or 10.1% of sales.”
Part of Pier 1's growth strategy includes improving its online presence and e-commerce functionality, which includes preparing for the launch of ‘Pier 1 To-You’ in late July. To that end, the company has established agreements with Demandware, Jagged Peak and Sogeti.
The company is also enhancing its planning and allocation systems with the initial rollout of a new POS system in fall 2012, which will be followed by an all store rollout post-holiday.
Pier 1's growth plan includes improving the in-store experience as well. In fiscal 2012, the company refurbished 125 stores, with an enhanced merchandise fixture package and new lighting upgrades in these locations, fully remodeled three stores, and added new merchandise fixtures throughout all Pier 1 Imports stores. During the next three years, the company will continue to deploy capital toward new store openings, store remodels, new merchandise fixtures, lighting upgrades, and other leasehold improvements.
During fiscal 2013, the company plans to:
Fully remodel approximately six to eight locations
Refurbish approximately 100 existing stores, with an enhanced merchandise fixture package and lighting upgrades implemented in these locations
Integrate new merchandise fixture elements into all stores that are expected to increase sales productivity and drive customer impulse purchases
The company’s long-term growth plans also include new store openings, as well as strategic relocations in major markets where increased sales productivity and store profitability opportunities exist. The company opened 15 new stores in fiscal 2012 and plans to open approximately 20 new locations in fiscal 2013. The company remains on track to open approximately 80 to 100 new stores and close approximately 30 to 50 existing locations by the end of fiscal 2016.
For its fourth quarter ended Feb. 25, Pier 1 reported that comparable-store sales increased 10.3% versus last year’s increase of 8.9%. Earnings per share for the quarter were $1.04 versus 48 cents per share last year.
For the fiscal year, the company reported that comparable-store sales increased 9.5% versus last year’s increase of 10.9%. Earnings per share for the year were $1.48 versus 85 cents per share last year.
For the fiscal year 2013, Pier 1 is expecting comparable-store sales growth in the mid single-digit range and earnings per share in the range of $1.06 to $1.12, representing year-over-year growth of 13% to 19%.