Pier 1 generates positive EBITDA in 2008 fiscal Q3

25 Dec '07

3 min read

Pier 1 Imports Inc announced a net loss from continuing operations of $10.0 million or $0.11 per share for the third quarter ended December 1, 2007 versus a net loss of $72.7 million or $0.83 per share for the year ago period.

Also, the Company generated a positive EBITDA (earnings before interest, taxes, depreciation and amortization) of $2.9 million including $6.5 million in charges primarily related to the exit of Pier 1 Kids.

Alex W. Smith, the Company's President and Chief Executive Officer, said, "Our strategy of profitable sales at sustainable margins, combined with a greater emphasis on lower ticket impulse items, is beginning to pay off.

We are pleased with our third quarter margin results, which would have been higher had it not been for the clearance of our Pier 1 Kids merchandise. I am obviously very delighted that we achieved a positive EBITDA for the first time in seven quarters."

Total sales for the third fiscal quarter declined 7.1% to $374.2 million from $402.7 million in the year-ago quarter, primarily as a result of the closure of 98 stores. Comparable store sales, which exclude Pier 1 Kids, clearance stores and e-commerce, declined 1.7% for the quarter.

Merchandise margins in the third quarter were 53.0% of sales, up from 49.7% in the year ago quarter. As previously indicated, the clearance activity related to closing down our Pier 1 Kids concept reduced the reported merchandise margin during this fiscal quarter.

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