Home furnishings retailer Pier 1 Imports
What analysts say:
-
Buy, sell, or waffle? Analysts are huddled at the end of the pier, with 14 of the 18 market prognosticators saying hold. The other four are evenly divided between buy and sell recommendations. A Goldman Sachs
(NYSE:GS) analyst just raised her target price 34% for the home decorator, expressing confidence in new management. - Revenues. Revenues, though, are expected to fall off the jetty 7% this quarter, declining to $350.7 million.
- Earnings. Losses are expected to narrow to $0.26 per share, a slightly better performance than the $0.32 per share loss recorded the year before.
What management says:
Despite the rosy outlook by the Goldman Sachs analyst, Pier 1 is not an easy play. Same-store sales have been dropping steadily and the fourth quarter saw an 11% decline in comps as more mass market outlets like Target
What management does:
Recently installed CEO Alex Smith has unveiled plans to keep the Pier from crumbling into the ocean. It's anticipated corporate HQ will be sold off, underperforming stores will be closed (60 have been forecast already), and employees will be fired. In March, Pier 1 announced it will eliminate 175 jobs for a cost savings of $17 million. A smaller, leaner operation offering a wide selection of goods at reasonable prices is in the works. The new strategy is expected to help the company regain its leadership position -- in a niche it once helped define -- and should help reduce the trend of sliding margins.
02/06 |
05/06 |
08/06 |
11/06 |
03/07 |
|
---|---|---|---|---|---|
Gross |
33.9% |
33.6% |
32.9% |
31.4% |
31.2% |
Operating |
(1.9%) |
(2.9%) |
(5.1%) |
(7.9%) |
(8.4%) |
Net |
(2.2%) |
(2.9%) |
(6.6%) |
(10.8%) |
(14.0%) |
One Fool says:
The housing industry slowdown has hit a lot of home decor retailers hard, and we shouldn't expect Pier 1 to be any different. Both Restoration Hardware
Lately I've been finding myself shopping at Pier 1 more. While prices may be higher than some place like Wal-Mart, the quality is much better. I dropped a few bills there on a furniture collection for my front porch after spending a day shopping the competition. While I like the product selection offered these days more than in the past, the stock still leaves something to be desired as an investment. If a turnaround is coming, I don't think it's apparent this quarter.
Related Foolishness:Pier 1 Imports has earned a one-star rating from Motley Fool CAPS, the new investor intelligence community. You can add your voice to the new stock rating service by joining today. It's free!
Fool contributor Rich Duprey owns shares of Wal-Mart, but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. Wal-Mart is a Motley Fool Inside Value recommendation. The Motley Fool has a disclosure policy.