Talk about a reversal of fortune. This past week, Pier One Imports (NYSE: PIR), maker of fine home furnishings, released its earnings report for the second quarter of 2012. The news was pretty good, and longtime investors should be pleased with how far the company has come since the financial crisis.
Earnings in detail
Pier One made a profit of $26.2 million for the quarter, earning $0.24 per share. That's a notable gain from the same quarter last year, when the company made $16.6 million. However, investors need to remember that these earnings include several one-time items, such as an income-tax benefit of nearly $6 million. Removing these one-time gains brings the company's earnings closer to $17 million, a number that's not nearly as impressive as the first glance may show.
Still, investors should be happy with other areas of growth. For instance, comparable-store sales increased 6.7% year over year, while revenue increased 8.3% to $368 million. All of this good news led the company to increase its full-year earnings guidance from a range of $1.08 to $1.14 per share to $1.10 to $1.16 per share. While this may seem like run-of-the-mill earnings stuff for most companies, many Pier One shareholders must be breathing a sigh of relief.
How far we've come
After all, it wasn't that long ago that there was some speculation of whether Pier One would be delisted. The company was one of many to see its stock decline drastically during the financial crisis, and in March 2009, Pier One's stock hit an all-time low of $0.11 per share. Pier One was hit especially hard, though, as people who lost their homes to foreclosures and evictions didn't have any reason to spruce up their pads with Pier One's products.
Since those dark days, the company has had an impressive turnaround. In the past 12 months Pier One's stock has risen 74%, and since March 2009 it has grown by an incredible 17,463%! But of course, these gains mean nothing unless we can see how the company looks compared with its competitors.
|
Company Name |
P/E |
Operating Margin |
Quarterly Revenue Growth |
Dividend Yield |
|---|---|---|---|---|
| Pier One Imports | 12.61 | 11% | 8% | 0.80% |
| Bed Bath & Beyond (Nasdaq: BBBY) | 16.63 | 17% | 5% | N/A |
| Target (NYSE: TGT) | 14.87 | 7% | 3% | 2.20% |
| Wal-Mart (NYSE: WMT) | 15.81 | 6% | 5% | 2.10% |
You can see that Pier One is an excellent growth stock. With large revenue growth and an above-average operating margin, the company looks like a good pick for the low P/E it's sporting.
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