Total sales for the first quarter increased 3.1% (3.9% on a constant currency basis after adjusting for an 80 basis point impact attributable to the year-over-year devaluation of the Canadian dollar).
Same-store sales rose 4% in May, and the company’s CEO said that June’s same-store sales are “trending in excess of May results.” Company comparable sales for the quarter increased 2.0% (2.8% on a constant currency basis).
Gross profit in the first quarter totaled $164.7 million, or 38.1% of total sales, compared with $167.7 million, or 40.0% of total sales in the first quarter of last year. First-quarter selling, general and administrative (SG&A) expenses came to $138.7 million, or 32.1% of total sales, compared with $131.5 million, or 31.4% of total sales in fiscal year 2015.
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The company said it had repurchased approximately 1.4 million shares of common stock during the quarter at a total cost of $17.6 million. Of the $200 million buyback program announced in April 2014, the company still has $97.2 million available to repurchase shares.
The company’s CEO said:
For the near term, we are resolutely focused on continuing to execute on the top line and demonstrating greater expense control. With our omni-channel transformation now complete, we are confident that we can begin to rebuild our profitability levels through measured sales and margin growth, along with expense leverage.
The company guided fiscal fourth-quarter fully diluted EPS at $0.07 to $0.08 and expects same-store sales to rise 4% to 5%. The consensus estimate called for EPS of $0.08.
For the full 2016 fiscal year ending in February, Pier 1 expects EPS of $0.83 to $0.87. Same-store sales are expected to grow in a range of 3% to 5%. The forecast for merchandise margins was lowered from a prior range of 58.0% to 58.2% to a new level of approximately 57.0%.
Pier 1’s shares traded higher by about 2.5% in the after-hours session, at $12.40 in a 52-week range of $111.38 to $18.45. Thomson Reuters had a consensus analyst price target of around $14.90 before the results were announced.
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