Pier One Imports, Inc. reported net income of $61.7 million in the fiscal 2013 fourth quarter for the 14 weeks ended March 2. Income fell 46 percent from $115.2 million for the same quarter in 2012.
However, this dramatic income decrease is not an accurate sign of Pier One’s performance in the past year. One year ago the fourth quarter’s net income was boosted by a one-time tax benefit of $33.8 million. In 2013, Pier One faced a tax expense of $37.9 million.
When tax provisions are removed from the equation, Pier One’s 2013 fourth quarter earnings were $99.7 million and 2012 was $81.5 million. The income in 2013 was up 22.3 percent from one year ago.
Revenues also increased 16 percent to $551.6 million from the 2012 fourth quarter’s revenue of $476.8 million.
Over fiscal 2013, Pier One revenues increased 11.1 percent, from $1.5 billion in 2012 to $1.7 billion one year later. For the year, net income before taxes showed an increase of 22.5 percent. With the 2012 tax benefit and 2013 tax expenses applied, Pier One’s net income decreased 23.4 percent to $129.4 million in 2013.
Growth also showed in comparable-store sales, an important measure of retail performance, over fiscal 2013. The fourth quarter had a comparable store sale gain of 7.9 percent, with a 7.5 percent increase in comp store sales over the year.
Pier One’s 2013 operating margin expanded to 11.7 percent from 10.1 percent in 2012. Operating income grew from $154.8 million to $199 million, a 28.6 percent increase.
Fiscal 2013 included the launch of Pier One’s e-Commerce website, a new point of sale system, a credit card reward customer program and improvements in merchandise and store technology.
Alex Smith, chief executive officer of Pier One, said in the April 11 earnings conference call that the website launch was highly successful.
“It was indeed a major milestone for Pier One Imports,” Smith said.
The site, which integrates online and in-store shopping, was launched nine months ago and receives more than one million visits per week. The average online ticket is nearly double the in-store ticket.
The introduction of the new point of sale system integrates online shopping with in-store shopping by offering many options for how customers shop, pay and have their purchases delivered.
The Rewards credit card system was also created to improve customer experience. These cardholders, who spend more, more frequently, account for over 25 percent of Pier One’s U.S. store sales.
The company is also in the final stages of a three-year plan (FY 2013-2015) for store improvements. This includes a $100 million investment to obtain better real estate, with many store openings, relocations and remodeling or refurbishing. Pier One has remodeled or refurbished 253stores since the beginning of the plan this year.
In 2014, the company expects earnings per share in the range of $1.26 to $1.31. This is an increase of 8 to 12 percent from 2013.
With near-bankruptcy five years behind it, Pier One looks to continue its growth.
“We’ve had three years of strong momentum, solid growth and numerous operational achievements,” Smith said. “Now with our one Pier 1 vision of the future, …we know we can keep our growth going.”
