Investing.com -- Shares in Pier 1 Imports surged more than 6% in after-hour trading, in spite of subdued earnings by the Fort Worth, Texas-based home furnishing retailer over its last quarter.
During Pier 1 Imports' first quarter, which ended in late-May, the retailer said its same-store revenues gained 2% on a year-over-year basis, bolstered by a 4% spike in existing location sales last month. For the quarter, however, Pier 1 experienced a 54% decline in profits from 15.1 million in 2014 to 6.9 million, amid increased costs related to its distribution network. The overhaul of Pier 1 Imports' distribution network resulted in a decrease in its margin for the quarter from 58.8% to 57.4%.
Still, Pier 1 Imports CEO Alex Smith credited a strong quarter by his company's E-Commerce division for a spike in revenue growth.
“We are pleased to deliver earnings per share in line with our expectations, reflecting revenue growth of 3%, as well as careful attention to expense control," Smith said in a statement. "E-Commerce continues to perform exceptionally well, generating strong improvement across all performance metrics, and accounting for nearly 17% of total sales in the quarter.”
While Pier 1 Imports earned revenues of $432 million during the quarter, it still fell below analysts' forecasts of $434 million, primarily due to currency fluctuations in the Canadian dollar. For the remainder of the fiscal year, Pier 1 Imports upgraded its forward guidance for same-store sales to 3-5% on the year. The company also expects to deliver earnings of 0.07-0.08 per share, in line with analysts' expectations.
"Now that we are into June and at the leading edge of our summer clearance event, company comparable sales are trending in excess of May results," Smith added.
“For the near term, we are resolutely focused on continuing to execute on the top line and demonstrating greater expense control. With our omni-channel transformation now complete, we are confident that we can begin to rebuild our profitability levels through measured sales and margin growth, along with expense leverage.”
Shares in Pier 1 Imports gained 0.74 or 6.16% in after-hours trading to 12.75.