The consumer retail environment is extremely cutthroat, and has been facing competitive headwinds (think Amazon), deterioration store traffic trends, and higher costs correlated with the growth of e-commerce adaptations. But one retail company has seen a positive turnaround from their investments in e-commerce, inventory control, and improved marketing. This company is Pier 1 Imports (PIR –Free Report) , and they are the Zacks Bull of the Day.
This Zacks Rank #2 (Buy) company consists of a chain of retail stores operating under the names Pier 1 Imports and The Pier, selling a wide variety of furniture, decorative home furnishings, dining and kitchen goods, accessories and other specialty items for the home. Additionally, the company, through certain subsidiaries, operates stores in the United Kingdom under the name The Pier. The company supplies merchandise and licenses the Pier 1 name to Sears Mexico and Sears Puerto Rico.
Recent Earnings Data
In the middle of December, management posted Q3 16 results where they easily beat both the Zacks consensus earnings and revenue estimates. The company saw year over year gains in the following; comparable sales +1.8%, e-commerce sales +28% (now accounting for about 20% of net sales), gross profit +6.7%, and EPS +30.7%.
According to Alex W. Smith, President and CEO, “Sales trends rebounded in the second half of November, following the election, which enabled us to deliver third quarter results well ahead of our forecast. Specifically, we had positive company comparable sales and higher than planned profits in the third quarter. We are making progress on our strategies to deliver shareholder value through our merchandising, marketing, supply chain and real estate initiatives. Our seasonal assortments are resonating with customers and we’re seeing strength across nearly all our product categories. As always, we’re pleased with how our teams and associates are executing against our holiday plans. We have a great deal of confidence in our brand positioning and long-term financial outlook. Pier 1 Imports has always been known for inspirational merchandise, great value and outstanding customer service. Layering our omni-channel capabilities on top of that foundation makes Pier 1 Imports a formidable force in the home furnishings space. Our teams are focused on continually enhancing our business model to ensure that we thrive in today’s era of retailing and well into the future.”
Price and Earnings Consensus Graph
As you can see from the graph below, Pier 1’s stock price and earnings estimates had been falling since the middle of 2013, but the recent earnings report and positive sales trends have caused the stock price and future earnings estimates to rise as of late.