Pier 1 Imports Shares Are Falling; Analysts Blast Bungled Forecast

Pier 1 Imports Inc PIR shares plunged Wednesday as analysts blasted the company for a bungled financial forecast.

The Fort Worth, Texas-based retailer's shares were off 22 percent recently at $13.22 a share. On Tuesday, the company cut its earnings outlook and fired its chief financial officer.

The newly revised outlook "raises questions about how well Pier 1 grasps its financial model," Morgan Stanley's Simeon Gutman noted.

The analyst cut his price target nearly 28 percent to $13 and maintained an Equal Weight rating.

Oppenheimer's Brian Nagel called the guidance revision "shocking" and said the sacked CFO, Charles H. Turner, is just "the fall guy" for recent forecasting mishaps.

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Turner, 57, abruptly retired Tuesday and the company named Laura A. Coffey interim chief financial officer.

Also Tuesday, the company shaved 18 percent from its forecast for the year ending February 28 to between $0.80 and $0.83 a share, from its earlier prediction of $0.95 to $1.05.

The company expects full-year same-store sales growth of 5 percent, down from an earlier forecast in the mid-to-high single digits.

Its earlier profit forecast "overestimated the recapture of lost sales from last year's storms," said Chief Executive Alexander W. Smith, who also blamed higher-than-expected distribution center costs.

But Gutman questioned the magnitude of implied costs in the revised forecast. "The numbers here are difficult to grasp," Gutman said.

Nagel downgraded Pier 1 to Market Perform, from Outperform, and removed his $20 target. "Clearly the the company has underestimated the costs associated with expanding an online business," he concluded.