Pier 1 Q4 net income rises, sets three-year growth plan
Fort Worth, Texas — Pier 1 Imports reported Thursday that net income for the quarter ended Feb. 26 surged 65% to $57.1 million, from $34.5 million a year earlier.
The home décor retailer cited improving sales, cost control efforts and strong merchandise margins for the substantial improvement.
Pier 1 also announced a three-year growth plan that includes investing $200 million of capital into its operations and starting a $100 million share buyback.
Revenue rose 8% to $426.6 million from $396 million, helped by better traffic, an improved conversion rate and higher average ticket. Same-store sales increased 8.9%.
For the month of March, the sales measure climbed 11.3%.
For the full year, profit increased 15% to $100.1 million. Annual revenue improved to $1.4 billion from $1.29 billion.
The company’s three-year growth plan includes improvements to existing stores, including a rollout of new fixtures, lighting upgrades and other enhancements. The plan also includes an effort to speed up Pier 1’s online initiative, with plans to boost online to at least 10% of revenue within five years. The plan includes having sales of $200 per retail square foot and having an operating margin of at least 10% of sales within three years.
Gap announces new $500 million credit facility
San Francisco — Gap has entered into a new $500 million revolving credit facility with a syndicate of banks led by BofA Merrill Lynch, J.P. Morgan and Citigroup Global Markets. The new financing matures in 2016 and replaces the company’s existing $500 million revolving credit facility. As part of the same financing agreement, the company also entered into a $400 million five-year term loan.
We believe this is an opportune time to optimize our capital structure by taking advantage of the favorable market conditions,” said Sabrina Simmons, CFO at Gap. “Today’s announcement points to our financial strength and underscores our commitment to driving long-term shareholder value.”
Harris Poll ranks Target as Value Retail Brand of the Year
New York City — A poll released Thursday by Harris Interactive named Target Corp. as its Value Retail Brand of the Year.
According to the 2011 Harris Poll EquiTrend Study, Target has the strongest consumer brand equity among retail brands. Overall, awards are given in each of 46 different categories.
This is the second consecutive year Target has led the way in the Value Retail category, with the gap between runner-up Wal-Mart increasing.
“In difficult economic times, consumers look for value,” said Jeni Lee Chapman, executive VP of brand and communications consulting at Harris Interactive. “Target is seen as a retailer with strong brand equity especially when compared to its competition. As consumers consolidate where they choose to spend their paychecks, those retailers with the highest brand equity are going to obtain greater share of that spending.”
In the cosmetics category, Sephora and Rimmel ranked second and third.