27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Pier 1 Imports Inc (NYSE:PIR) shares are in disaster mode after suffering through another disappointing earnings release Wednesday that saw CEO Alasdair James step down.
Third-quarter earnings came in at a 36-cent-per-share-loss, missing estimates by 30 cents. At $413.232 million, sales fell short of estimates by $38.748 million.
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The Analyst
UBS analyst Michael Lasser maintains a Sell rating on Pier 1 and lowered the price target from $1 to 50 cents.
The Thesis
Pier 1’s weak results in a strong consumer spending environment reflect the depth of the company's challenges, Lasser said in a Wednesday note. (See his track record here.)
Same-store sales were down 10.5 percent in the quarter, and the decline would have been 600 basis points steeper if not for a holiday shift, the analyst said.
“The shortfall was driven in part by in-stock challenges and price reductions to reframe PIR’s value proposition."
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Pier 1 lowered its price points before it could fully adjust its sourcing strategy, Lasser said, adding that the retailer faces further hurdles as it enacts a new sourcing plan.
With board member Cheryl Bachelder taking over as interim CEO, Pier 1 is exploring strategic alternatives, but Lasser is skeptical that any bold actions will lead to a favorable outcome.
"The company will narrow its focus on merchandise that drives its sales. Also, it will re-engineer its cost structure. We agree a more aggressive turnaround approach is needed. But at this point, it's unclear how much benefit it can generate," the analyst said.
Pier 1 has captured $20 million of annualized SG&A savings for fiscal 2020, but UBS said reinvigorating traffic in a competitive environment will be tough and the company’s performance will remain challenged well into 2019.
Price Action
Pier 1 Imports shares were down 61.74 percent at 44 cents at the time of publication Thursday.
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Photo by Anthony92931/Wikimedia.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.