Hot Stock under Review: Pier 1 Imports (NYSE: PIR)

On Friday, Shares of Pier 1 Imports (NYSE: PIR) skyrocketed 24.53% to $0.69. The stock grabbed the investor’s attention and traded 16,514,245 shares as compared to its average daily volume of 2.02M shares. The stock’s institutional ownership stands at 70.60%.

Pier 1 Imports, Inc. (PIR) recently stated financial results for the second quarter ended September 1, 2018.

Second Quarter Fiscal 2019 Summary:

  • Net sales reduced 12.8% to $355.30M contrast to the second quarter of fiscal 2018; Company comparable sales reduced 11.4% contrast to the second quarter of fiscal 2018;
  • Net loss of $51.10M, or ($0.63) per share, and EBITDA (earnings before interest, taxes, depreciation and amortization) of ($49.30)M; Inventory down 15.4% from the second quarter of fiscal 2018;
  • Cash and cash equivalents of $117.0M, with no short-term borrowings under the Company’s $350.0M revolving credit facility during the quarter; and

Second Quarter Fiscal 2019 Results of Operations:

Net sales for the second quarter of fiscal 2019 reduced 12.8% to $355.30M, contrast to $407.60M for the second quarter of fiscal 2018. Company comparable sales reduced 11.4% as contrast to the prior year period. The Company operated 989 stores at the end of the second quarter of fiscal 2019, a decrease of 23 from the second quarter of fiscal 2018.

Gross profit for the second quarter of fiscal 2019 totaled $93.50M, or 26.3% of net sales, contrast to $140.20M, or 34.4% of net sales, for the second quarter of fiscal 2018.

Selling, general and administrative (“SG&A”) expenses for the second quarter of fiscal 2019 were $143.10M, or 40.3% of net sales, contrast to $138.10M, or 33.9% of net sales, for the second quarter of fiscal 2018. The following table details the breakdown of SG&A expenses for the second quarter of fiscal 2019 as contrast to last year (in0Ms). The year-over-year increase mainly reflects planned investments in marketing related to the Company’s brand re-launch.

Operating loss for the second quarter of fiscal 2019 was $62.50M contrast to operating loss of $11.30M for the prior year period. Net loss for the second quarter of fiscal 2019 totaled $51.10M, or ($0.63) per share. This compares to net loss of $7.80M, or ($0.10) per share, and adjusted net loss (non-GAAP) of $4.20M, or ($0.05) per share a year ago. Adjusted net loss in the second quarter of fiscal 2018 excludes $6.60M ($3.60M, or $0.05 per share, net of tax) of expense for legal and regulatory costs regarding a California wage-and-hour matter and an ongoing Consumer Product Safety Commission (“CPSC”) inquiry. EBITDA in the second quarter of fiscal 2019 was ($49.30)M contrast to EBITDA of $2.80M and, after excluding the legal and regulatory costs referred to above, adjusted EBITDA of $9.40M, in the second quarter of fiscal 2018. A reconciliation of these non-GAAP measures to GAAP is offered below.

Year-to-Date Results of Operations:

Net sales for the 26 weeks ended September 1, 2018, were $727.20M, a decrease of 11.0% from the same period in fiscal 2018. Company comparable sales for the year-to-date period reduced 9.8% from the prior year.

Gross profit for the year-to-date period of fiscal 2019 totaled $213.60M, or 29.4% of net sales, contrast to $291.80M, or 35.7% of net sales, for the same period a year ago.

SG&A expenses for the 26 weeks ended September 1, 2018 were $281.70M, or 38.7% of net sales, contrast to $278.30M, or 34.1% of net sales, in the fiscal 2018 period. The following table details the breakdown of SG&A expenses for the 26-week period of fiscal 2019 as contrast to last year (in millions).

For the 26-week period ended September 1, 2018, operating loss was $93.80M contrast to operating loss of $13.70M in the same period a year ago. Net loss for the 26 weeks ended September 1, 2018 totaled $79.60M, or ($0.99) per share. This compares to net loss of $10.80M, or ($0.13) per share, and adjusted net loss (non-GAAP) of $7.20M, or ($0.09) per share for the 26-week period ended August 26, 2017. Adjusted net loss in the year-to-date period of fiscal 2018 excludes $6.60M ($3.60M, or $0.04 per share, net of tax) of expense for the legal and regulatory costs referred to above. EBITDA for the 26-week period ended September 1, 2018 was ($68.1)0M contrast to EBITDA of $14.50M, and after excluding the legal and regulatory costs referred to above, adjusted EBITDA of $21.10M, in the 26-week period of fiscal 2018. A reconciliation of these non-GAAP measures to GAAP is offered below.

Balance Sheet Highlights:

As of September 1, 2018, the Company had $117.0M of cash and cash equivalents, $192.0M outstanding under its senior secured term loan and no working capital borrowings outstanding under its $350.0M secured revolving credit facility. Inventories at the close of the second quarter reduced 15.4% to $386.70M, contrast to $457.30M a year ago.

PIR has a market value of $42.41M while its EPS was booked as $-1.43 in the last 12 months. The stock has 61.34M shares outstanding. In the profitability analysis, the company has gross profit margin of 32.30% while net profit margin was -0.80%. Beta value of the company was 2.01; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 3.90.

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