Pier 1 Imports Inc Sinks After Weak Q2 Results, Cut Outlook

Pier 1 Imports Inc PIR shares fell sharply in the extended session Wednesday after the company said weak traffic and narrowed margins hurt second-quarter earnings.

The Fort Worth, Texas, retailer also cut its 2015 outlook to between $0.95 and $1.05 per share, from its earlier forecast of $1.14 to $1.22 per share. Analysts expect $1.13 per share on sales of $1.9 billion.

"Our recent financial results are not reflective of the long-term value that will be derived from a mature Pier 1 Imports omni-channel business," Chief Executive Alexander W. Smith said, while touting a plan to boost Internet and direct sales.

Smith added, however, that "the fact remains that our Pier 1 Imports stores are central to our profitability."

Second-quarter profit margins were hurt by promotional pricing as well as fulfillment costs associated with growing e-commerce sales, the company said.

Same-store sales in the recent period grew 4.5 percent while net income fell to $9.2 million, or $0.10 per share, from $17.8 million, or $0.17 per share a year earlier.

Sales increased 5.8 percent to $418.6 million, from $395.6 million in the year-earlier quarter.

Wall Street expected earnings of $0.14 per share on sales of $426 million.

In the extended session, Pier 1 traded recently at $13.97, down 10.1 percent.