There may be retailers worst off than Pier 1 Imports, Inc (NYSE: PIR), but they can be counted on one hand. Very poor results knocked the stock to just above $1, down from a 52-week high of $5.92. Wall St. clearly thinks the retailer does not have much life in it.
Pier 1 did not even announce its full results as it put out numbers, unusual and perhaps telling. Management did say comparable store sales had fallen 11.4%. They also said EPS would be a loss $.62 to $.64. The market sold the stock down 20% to $1.36.
Alasdair James, President and CEO, commented:
“We are disappointed in our results for the second quarter, which primarily reflect execution challenges as we prepared for and implemented our August brand re-launch. We are in the very early stages of the multi-year ‘New Day’ strategic plan we announced in April, and while we remain confident that our plan is the right course for Pier 1, it is now clear that our initiatives are taking longer than expected to gain traction. Our marketing program did not drive the level of traffic we had anticipated, and we experienced delays in getting certain new products into our stores.
James does not have multiple years. He might have until the end of 2018. He has been at the company long enough to be counted a major part of the problem. He joined May 1, 2017. The stock was $7 then. James has the distinction of an earlier tenure as President of Kmart, the greatest retail wreck of the last decade
To add insult to injury, James has decided to take a non-traditional course with guidance, another decision which spooked investors. Management announced:
Given that it is taking more time for Pier 1’s ‘New Day’ initiatives to gain traction, the Company is discontinuing its fiscal 2019 guidance at this time; however, the Company expects to continue providing commentary on its forward-looking business trends on its quarterly earnings calls. Pier 1 expects its top-line trend to materially improve as the execution of key initiatives progresses and remains committed to its long-term net sales growth and EBITDA margin targets, but now believes these targets may be achieved over a longer time horizon.
A longer time horizon is yet another thing James does not have.
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