Pier 1 Imports might have seen its first-quarter net income dip as reported on Thursday, but sales rose as well as the future possibilities surrounding the company’s omni-channel strategy.
“And with the acceleration of ecommerce, there is, we know, great potential to drive incremental brand traffic by segmenting and customizing our marketing messages based on our customer shopping behavior,” Pier 1 Imports President and CEO Alex W. Smith said during the June 19 conference call. “We are making great strides in this area, and it is a key priority for us for the remainder of this year.
For the first quarter ended May 31, 2014, Pier 1 Imports reported net income of $15.1 million, compared to last year’s first-quarter net income of $20.3 million. First-quarter sales, however, increased 6.1% to $419.1 million, compared to $394.9 million for the same period last year. Same-store sales jumped 6.3% during the first quarter, attributable to increases in total brand traffic, conversion, and higher average ticket.
“We achieved company comparable sales growth of 6.3% in the first quarter, reflecting strong traffic to the Pier 1 Imports brand,” Smith explained. “We are pleased to see increasing strength in ecommerce, which exceeded our plans and reached 9% of sales for the quarter. At the same time, 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. 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.”
Last year, Pier 1 saw 4% of its total sales from its online platform. Traffic is up nearly twice as much as compared to one year ago.
“Our expanded spring and outdoor assortments resonated with customers and were buoyed by a strong marketing message,” Smith said. “Our talented merchants continue to curate exceptional merchandise which, combined with our ‘1 Pier 1’ strategy, creates an engaging shopping experience. We believe this is an exciting time to be a retailer–we’re seeing a profound shift in the shopping behavior of our customers. Our timely transformation from a brick-and-mortar retailer to one with full omni-channel capabilities has us well positioned to seize upon this change and drive brand growth.”
Pier 1 projects ecommerce sales of at least $200 million in fiscal 2015, and ecommerce sales of at least $400 million in fiscal 2016.
“Last fiscal year was transformational for us, as I said on our last earnings call,” Smith added. “This year, the transformation is gaining speed, as we accelerate the execution of our 1 Pier 1 omni-channel strategy. For the first quarter of fiscal 2015, we generated strong traffic to the Pier 1 Imports brand and achieved a company comparable sales gain of 6.3% against the backdrop of a challenging retail climate. We are delighted with the dramatic increase in ecommerce and how the advantages of 1 Pier 1 strategy have been embraced by our customers both new and returning. First quarter online sales accounted for 9% of our total business, well ahead of where we were trending in the back half of last year. Ecommerce sales increased 260% from the first quarter last year and almost 50% sequentially from the fourth quarter.”