Pier 1 Imports, Inc. Earnings Call Nuggets: Comp Guidance, Expense Growth

On Thursday, Pier 1 Imports, Inc. (NYSE:PIR) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Comp Guidance

Budd Bugatch – Raymond James: Congratulations on a lovely year for you and all your associates and for the shareholders as well. Couple of questions I won’t take long. But on the comp guidance and as you look at the year how should we think about it quarter by quarter I know you’ve just given annual guidance, is there any particular quarter where there might be a discrepancy or is it pretty much evenly spaced through the year?

Alexander W. Smith – President and CEO: Well, I think you can assume pretty even quarter-to-quarter.

Budd Bugatch – Raymond James: On your 225 per square foot plan that does include the benefits of e-Commerce just making sure that I — I think as you said it does, but I would just wanted to make sure I was right on that?

Alexander W. Smith – President and CEO: The 225?

Budd Bugatch – Raymond James: The 225 sales per square foot goal?

Charles H. Turner – Senior EVP and CFO: It’s going to include the Pier 1 To-Go, but not the e-Commerce wholesome business.

Budd Bugatch – Raymond James: So not Pier 1 To-You?

Alexander W. Smith – President and CEO: No, no, that’s going to be a separate segment, but that won’t be included.

Budd Bugatch – Raymond James: Thank you for that clarification.

Alexander W. Smith – President and CEO: We can always change (that in end) is a thought.

Budd Bugatch – Raymond James: Say again.

Alexander W. Smith – President and CEO: Nothing.

Budd Bugatch – Raymond James: On the marketing expense, I know it’s going to stay at around 5%, but it is going to vary quarter-by-quarter. Has it had this year?

Alexander W. Smith – President and CEO: Now, speaking from memory, but we can confirm it when you thought to carry later from memory the third quarter takes the biggest hit as a percentage of sales, because there is all that pre-holiday marketing and then the fourth quarter is the lowest percentage to sales. I think one and two are roughly similar.

Budd Bugatch – Raymond James: That’s about right. I just want to make sure if that was still on the plan. Finally for me, just on looking at CapEx, I think you’re going to open 20 new stores and if I did my math right on last year it’s about 600,000 per stores. So, of the half, I think you said 35 million for the store is of that about 12 million for the new stores?

Charles H. Turner – Senior EVP and CFO: Roughly.

Budd Bugatch – Raymond James: Congratulations and best of luck on continuing to execute for this year.

Alexander W. Smith – President and CEO: Thanks, Budd. See you.

Expense Growth

Brian Nagel – Oppenheimer: Congratulations on another nice quarter and nice year, a couple of questions, first off, thank you for the guidance that you’ve given this year and your longer term. But any comment on sales trends here thus far in Q1 as we head into the Easter holiday?

Alexander W. Smith – President and CEO: Not really, Brian. So what we thought now we’re giving annual guidance, we’ll stick to that and the only monthly sales that you are going to hear from us in December.

Brian Nagel – Oppenheimer: The second question I have, I guess, more for Cary, on the expense growth. You addressed in your prepared comments, but I just want to make sure, how should we think about, maybe in dollar terms, the e-Commerce investments we’re going to see here, I guess, presumably for Q1 and Q2 as we head into the launch of that effort?

Charles H. Turner – Senior EVP and CFO: The fixed expenses will be up a couple of million compared to last year both first two quarters, in each of the two quarters.

Brian Nagel – Oppenheimer: So, if we look at it, going outlook in backwards, if you look at that relatively fixed category, which expenses have been tracking higher than your guidance. Is that overage, if you will, related primarily to the e-Commerce launch or is there something else happening as well?

Charles H. Turner – Senior EVP and CFO: No, it’s also the performance pack, the incentive pack is in there.

Brian Nagel – Oppenheimer: So that’s simply a function of better sales then?

Charles H. Turner – Senior EVP and CFO: Better performance on the bottom-line.

To contact the reporter on this story: Lindsey Grossman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com