Pier 1 Q3 Loss Up to $20M

By Staff -- Home Textiles Today, 12/8/2008 12:00:00 AM

Fort Worth, Texas —

Pier 1 Imports anticipates a comp sales drop of 16% to 18% for its third quarter, and stated, "EBITDA before special charges is currently forecasted to be negative $16 - $20 million."

"Merchandise margins are expected to be approximately 52.5%," the 1,100-unit retailer said, referring to a measure less often used by retailers than average gross margin.

President and ceo Alex Smith said that while store traffic was down 10% year-to-year in October, "customers who are visiting our stores continue to respond well and we see meaningful improvements in both conversion rate and units per transaction. These increases are offset by the fact customers primarily shopped for 'small treats,' such as Halloween and holiday decor, and smaller home furnishings and furniture purchases, resulting in a lower average ticket."

Pier 1 issued the guidance to coincide with an analyst and shareholder store tour. The company will report actual Q3 results on Dec. 18.