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04/05/2012

Pier 1 reinstitutes dividend, bumps up growth plan

Pier 1 Imports announced strong fourth-quarter results that met Wall Street’s expectations, reinstituted a cash dividend for the first time in more than five years, raised its profit margin goal, and said it would invest $200 million under a new three-year growth plan.

“We’re beginning the new fiscal year in a strong position,” Smith said. “We are preparing for our next phase of growth.”

Pier 1 reported a $115.2 million net profit, or $1.04 per share of common stock, compared to a $57.1 million net profit, or 48 cents per share, for the same period the prior year.

In the most recent of the quarters, excluding tax benefits, Pier 1’s earnings were 48 cents per share, which met Wall Street expectations.

Pier 1 said its sales in comparable stores, those open at least a year, an industry benchmark, rose 10.3 percent in the latest quarter. That was on top of an  8.9 percent increase in the prior year’s quarter.

Pier 1’s board announced a cash dividend of 4 cents per share, to be paid May 2 to shareholders of record April 18. It’s the company’s first dividend since July 2006.

“The ongoing strength of our operating performance and long-term growth opportunities, combined with our solid financial position and strong cash flow, provides us with the flexibility to return value to our shareholders,” Smith said.

Pier 1’s new growth plan called for an increase in operating margin to 12 percent from 10 percent by fiscal 2015. The company said it expects to reach $225 in sales per square foot by that time, raising its goal from $200. It’s currently at $184.

Smith said Pier 1 continues to move toward a “best in class” e-commerce platform, and is getting ready to launch its “Pier 1 To-You” product this summer.

Pier 1 expects its online sales will constitute at least 10 percent of total sales by 2016.

For this fiscal year, Pier 1 expects to fully remodel six to eight stores, and refurbish about 100 with new fixtures and lighting.

- Scott Nishimura

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