Pier 1 Imports, Inc.
) has been in the midst of a turnaround but a recent first quarter
earnings miss put that in jeopardy. As a result, this Zacks Rank #5
(Strong Sell) has seen its full year estimates slashed in the last
Pier 1 Imports is an importer of global decorative home furnishings
and gifts. It sells through retail stores as well as through its
e-commerce site Pier1.com.
First Quarter Results Disappoint
On June 19, Pier 1 reported fiscal first quarter results for the
quarter ending May 31. It missed the Zacks Consensus by 4 cents.
Earnings were $0.16 compared to the consensus of $0.20.
It was the third miss in the last four quarters.
While same store sales grew 6.3% due to higher average ticket and
an increase in total brand traffic, and e-Commerce sales came in
way ahead of expectations, at 9% of total sales for the quarter,
the company also was pessimistic about the retail environment.
It described it as being "highly promotional." Gross profits were
also still being pressured in the near-term.
Full Year Guidance Lowered
Given the retail pressures, it lowered its full year EPS guidance
by 2 cents to the range of $1.14 to $1.22 from $1.16 to $1.24.
It also expects comparable sales growth, including e-Commerce, to
be in the high-single digits for the year.
Analysts immediately cut estimates to match the lowered guidance.
12 estimates for fiscal 2015 fell in the last 30 days to $1.14 from
That's still earnings growth of 13.3% in fiscal 2015.
Analysts aren't as pessimistic about fiscal 2016 either. Pier 1 is
expected to grow earnings by 19.9%.
Shares Take a Beating
After the earnings miss, investors dumped the shares which sank to
a new 52-week low.
Pier 1 now trades with a forward P/E of just 13.5 which is cheap
compared to the overall S&P 500 which averages 17x.
However, the Zacks Rank is a short-term recommendation of 1 to 3
months so investors with a long-term outlook may look at other
But if you're nervous about the short-term, but still want to
invest in a home furnishings company, you may want to consider
Williams Sonoma Inc.
). It is a Zacks Rank #2 (Strong Buy) and hasn't missed on earnings
in 5 years.
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WILLIAMS-SONOMA (WSM): Free Stock Analysis
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