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Pier 1 Imports Q3 results in line with guidance
23 Dec '08
5 min read
Selling, General and Administrative Expenses
During the third quarter, selling, general and administrative expenses were $115 million, a decline of $8 million when compared to the year ago quarter, and included special charges, primarily non-cash, of approximately $7 million compared to $6 million in the third quarter last year. Special charges during the quarter included $5 million in store impairments and $2 million in lease termination and other charges.
Excluding the special charges, selling, general and administrative expenses declined approximately $9 million from the year ago period. The primary drivers of the decrease in costs were savings of approximately $7 million in administrative payroll, $5 million in store payroll and supplies, offset by an increase in marketing expense of $3 million.
Selling, general and administrative expenses were $332 million during the first nine months, a decline of $42 million when compared to the year ago period, and included special charges of $15 million versus approximately $20 million last year. Special charges in the first nine months of fiscal 2009 included impairment charges of $5 million, lease termination charges of $5 million, severance and other charges of $3 million and costs related to the withdrawn offer to acquire Cost Plus Inc. of $2 million.
Excluding the special charges, ongoing selling, general and administrative expenses declined $37 million from the year ago period. The primary drivers of the decrease in costs were savings of approximately $9 million in marketing expense, $14 million in store payroll and supplies, $9 million in administrative payroll and approximately $5 million in other general administrative costs.
Inventory and Liquidity
During the third quarter, the Company continued to focus on the timing and appropriate level of purchases, resulting in inventory at the end of the quarter of $399 million, an improvement over previously provided expectation of $410 million, compared to $433 million at the end of the third quarter last year. The Company expects to end the year with approximately $350 million in inventory.
As of the end of the third quarter, cash and cash equivalents were $117 million. Including credit card receivables of $15 million as of the end of the quarter, the Company began the fourth quarter with approximately $132 million in cash and cash equivalents. Additionally, the Company has $150 million available for borrowing under its secured credit facility, giving the Company total liquidity of $282 million as of the end of the third quarter.
Fiscal 2010 Outlook
The Company believes that the current macro environment will continue well into fiscal 2010 and possibly longer. In anticipation of this, management is taking a conservative approach to merchandise purchases, expense planning and capital expenditures. Management will continue to review and evaluate all expenses and other uses of liquidity very prudently. Management believes it has sufficient liquidity to fund ongoing operational obligations and capital expenditure requirements.
During the third quarter, selling, general and administrative expenses were $115 million, a decline of $8 million when compared to the year ago quarter, and included special charges, primarily non-cash, of approximately $7 million compared to $6 million in the third quarter last year. Special charges during the quarter included $5 million in store impairments and $2 million in lease termination and other charges.
Excluding the special charges, selling, general and administrative expenses declined approximately $9 million from the year ago period. The primary drivers of the decrease in costs were savings of approximately $7 million in administrative payroll, $5 million in store payroll and supplies, offset by an increase in marketing expense of $3 million.
Selling, general and administrative expenses were $332 million during the first nine months, a decline of $42 million when compared to the year ago period, and included special charges of $15 million versus approximately $20 million last year. Special charges in the first nine months of fiscal 2009 included impairment charges of $5 million, lease termination charges of $5 million, severance and other charges of $3 million and costs related to the withdrawn offer to acquire Cost Plus Inc. of $2 million.
Excluding the special charges, ongoing selling, general and administrative expenses declined $37 million from the year ago period. The primary drivers of the decrease in costs were savings of approximately $9 million in marketing expense, $14 million in store payroll and supplies, $9 million in administrative payroll and approximately $5 million in other general administrative costs.
Inventory and Liquidity
During the third quarter, the Company continued to focus on the timing and appropriate level of purchases, resulting in inventory at the end of the quarter of $399 million, an improvement over previously provided expectation of $410 million, compared to $433 million at the end of the third quarter last year. The Company expects to end the year with approximately $350 million in inventory.
As of the end of the third quarter, cash and cash equivalents were $117 million. Including credit card receivables of $15 million as of the end of the quarter, the Company began the fourth quarter with approximately $132 million in cash and cash equivalents. Additionally, the Company has $150 million available for borrowing under its secured credit facility, giving the Company total liquidity of $282 million as of the end of the third quarter.
Fiscal 2010 Outlook
The Company believes that the current macro environment will continue well into fiscal 2010 and possibly longer. In anticipation of this, management is taking a conservative approach to merchandise purchases, expense planning and capital expenditures. Management will continue to review and evaluate all expenses and other uses of liquidity very prudently. Management believes it has sufficient liquidity to fund ongoing operational obligations and capital expenditure requirements.
Pier 1 Imports Inc
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