Cost Plus bid aside, Pier 1 in a world of trouble after results

[marmar]

from MarketWatch:



Pier 1 tumbles after big miss in quarterly results

By Andria Cheng, MarketWatch



NEW YORK (MarketWatch) -- Pier 1 Imports Inc.'s shares nearly a fifth of their value Thursday after the home furnishing retailer's quarterly loss was much wider than analysts had expected.

The company reported first-quarter net loss narrowed to $32.8 million, or 37 cents a share, from $56.4 million, or 64 cents a share, a year earlier.

Revenue for the period fell 13% to $310 million.

Excluding items, Pier 1 would have lost 34 cents a share, according to Colin McGranahan of Sanford C. Bernstein & Co. On that basis, analysts had been expecting an average loss of 15 cents a share on sales of $338 million, according to estimates compiled by FactSet Research.

Pier 1 shares dropped 19.7% to $5.01 at the close. Shares of Cost Plus fell 6% to $3.29.

While merchandise margin improved to 51.3% from 45.5%, it also missed analysts' expectations.
Pier 1, hurt by the declining housing market, has sold its headquarters and sought to lower costs and minimize discounts to help shore up results. It offered to buy Cost Plus in part because it said the combination would help yield cost savings. It said Monday it would take its offer directly to shareholders of Cost Plus, which rejected its unsolicited proposal.

"While {Pier 1) has shifted aggressively toward more full-priced selling, the challenging macro environment and still less than perfect execution likely weighed on margins," said Bernstein's McGranahan. "More work remains to be done. {Cost Plus is) still an overhang. (Pier 1) will need to provide a more thorough explanation." ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/pier-1-shares-tumble-after/story.aspx?guid=%7B9FCCB9E3%2DBC2A%2D4EC8%2DBF58%2DE45A24E546DE%7D

[rox63]

1. A lot of people are only spending on necessities lately

And most of the merchandise Pier 1 sells doesn't fall under that category. And even for big stuff like furniture, people are putting off spending right now. They are delaying most major purchases because of the economy.

[madaboutharry]

2. I guess the table and chairs I just bought on sale

at Pier 1 for my patio couldn't save them.

I actually liked Pier 1 the way it was years ago. Cost Plus is now World Market and has lost a lot of the charm it from what I remember when I was a kid.

[davidinalameda]

3. I like Cost Plus

I could shop there all day