Promotions impact Pier 1 profit
Fort Worth, Texas – Promotions took their toll on profitability at Pier Imports Inc. during the first quarter of fiscal 2015. The company reduced its earnings guidance for fiscal 2015.
Net earnings fell 25% to $15.1 million from $20.3 million in the same quarter of fiscal 2014.
Total sales for the first quarter were $419.1 million, a 6.1% increase from $394.9 million in the year-ago quarter. Same-store sales increased 6.3%, attributable to increases in total brand traffic, conversion and higher average ticket.
"The retail environment remains highly promotional and is pressuring gross profit in the near-term," said CEO Alex W. Smith. "As a result, we are adjusting our full-year earnings forecast accordingly."
Pier 1 Imports’ e-commerce strategy gains momentum
Increasing strength in Pier 1 Imports’ e-commerce business translated into better-than-expected sales that fueled the company’s overall financial results for the first quarter.
Total sales for the quarter were $419.1 million, a 6.1% increase versus $394.9 million in the year-ago quarter. Comparable sales increased 6.3% during the quarter, driven by increases in total brand traffic, conversion and higher average ticket. E-commerce sales exceeded the company’s estimates, reaching 9% of sales for the quarter.
“Our stores continue to serve as an important and productive gateway to Pier1.com, with approximately one-quarter of our online transactions originating at the store and one-third of orders placed at home being picked up in-store,” said president and CEO Alex W. Smith. “Given the momentum we are experiencing, we now anticipate that sales through Pier1.com will exceed $200 million in fiscal 2015. Nevertheless, the retail environment remains highly promotional and is pressuring gross profit in the near-term. As a result, we are adjusting our full-year earnings forecast accordingly.”
The company’s expanded spring and outdoor assortments resonated with customers, according to Smith, and were buoyed by its marketing efforts. Smith added that investments in omnichannel capabilities has positioned the company well to drive brand growth.
Looking ahead, the company now expects to achieve e-commerce sales of at least $200 million in fiscal 2015, and e-commerce sales of at least $400 million in fiscal 2016. This compares to previous expectations for e-commerce sales to represent 10% of total sales by the end of fiscal 2016. The company reiterated its previously stated goals for sales per retail sq. ft. of $225 and operating margins of approximately 11% to 11.5% by the end of fiscal 2016.
Cole Haan opens Tokyo flagship, plans Asia growth
Scarborough, Maine — Cole Haan is opening a flagship location in the Ginza, Tokyo’s premier shopping district. The 2,000-sq.-ft. store debuts the company’s global format. Cole Haan also plans to use the store as a launching point for growth in the Asia-Pacific region.
Architecture firm Anderson Architects in New York led the design of the ground-floor store, in partnership with local architects Garde Co.
"This store marks the new face of Cole Haan in its retail stores and will be the basis for our expansion into China, Korea and the rest of the Asia Pacific region," said Jack Boys, CEO of Cole Haan. "It represents an outstanding blend of tradition and modernity, with distinct presentations to both our female and male consumers."