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Pier 1 Imports Q4 Profit Falls On Tax Provision, Sees FY14 Earnings Below View

Pier 1 Imports Q4 Profit Falls On Tax Provision, Sees FY14 Earnings Below View
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Pier 1 Imports, Inc. (PIR: Quote), a specialty retailer of decorative home furnishings and gifts, Thursday reported a sharp decline in fourth-quarter profit, reflecting an income tax provision, despite higher sales. Adjusted earnings, as well as revenues met analysts' expectations. The company also forecast fiscal 2014 earnings below estimates.

Pier 1 noted that during this summer, it expects to complete implementation of its new POS system, which will be transformational for the company and enable it to expand the business in the coming years.

In the fourth quarter, the company's net income plunged to $61.7 million or $0.58 per share from $115.21 million or $1.04 per share reported last year.

Income before income taxes grew to $99.65 million from $81.45 million a year earlier. For the quarter, the company recorded a tax provision of $37.95 million pounds, while the prior-year quarter had a tax benefit of $33.76 million, resulting from a change in the company's valuation allowance.

On a non-GAAP basis, net income, utilizing a 35.6 percent annual effective tax rate for fiscal 2013, amounted to $64.2 million or $0.60 per share. Adjusted earnings per share were $0.48 for the fourth quarter of fiscal 2012.

On average, 13 analysts polled by Thomson Reuters expected earnings per share of $0.60 for the quarter. Analysts' estimates typically exclude one-time items.

For the 14-week period ended March 2, the company posted net sales of $551.63 million, up 15.7 percent from $476.76 million in the 13-week fourth quarter of last year. Analysts estimated revenues of $551.44 million for the quarter.

Comparable-store sales, on a 13-week basis, rose 7.9 percent, compared to a 10.3 percent increase a year earlier. The company attributed strong comparable-store sales results to growth in store traffic and higher average ticket.

Alex Smith, president and chief executive officer of the company said, "We delivered our 14th consecutive quarter of significant sales and profit growth, re-introduced our dividend and repurchased $100 million of Pier 1 Imports stock, returning substantial value to our shareholders."

Looking ahead to fiscal 2014, the company sees earnings per share in the range of $1.26 to $1.31, and comparable-store sales growth in the mid single-digit range. The guidance for fiscal 2014 is on a comparable 52-week basis. Analysts are looking for earnings of $1.38 per share for the fiscal year.

For the 53-week period ended March 2, earnings per share were $1.20.

Pier 1 aims about 30 store openings and 14 closings/relocations for a net increase of 16 stores.

PIR closed Wednesday's regular trading at $23.34 on the NYSE.

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by RTT Staff Writer

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