Pier 1 shares move down on lower profits, forecast

Profits declined by 25 percent at Pier 1 Imports in the first quarter despite higher sales as promotions ate into margins.

But the news wasn't all bad.

Sales totaled $419.1 million, a 6.1 percent increase from a year ago, and comp-store sales -- at stores open at least a year -- increased 6.3 percent.

Alex W. Smith, president and chief executive officer, said online sales showed strong growth and reached 9 percent of total sales. The company now projects that e-commerce sales will reach at least $200 million in this fiscal year and at least $400 million next year.

Still, the Fort Worth-based home furnishings retailer lowered its profit forecast for the year to a range of $1.14 to $1.22 a share, down from previousl guidance of $1.16 to $1.24. The company's stock was down 10 percent, or $1.89, at $16.37 in early trading.

Here's what Smith had to say in the press release:

“We achieved company comparable sales growth of 6.3% in the first quarter, reflecting strong traffic to the Pier 1 Imports brand. We are pleased to see increasing strength in e-Commerce, which exceeded our plans and reached 9% of sales for the quarter. At the same time, our stores continue to serve as an important and productive gateway to Pier1.com, with approximately one-quarter of our online transactions originating at the store and one-third of orders placed at home being picked up in-store. Given the momentum we are experiencing, we now anticipate that sales through Pier1.com will exceed $200 million in fiscal 2015. Nevertheless, the retail environment remains highly promotional and is pressuring gross profit in the near-term. As a result, we are adjusting our full-year earnings forecast accordingly.”

“Our expanded spring and outdoor assortments resonated with customers and were buoyed by a strong marketing message. Our talented merchants continue to curate exceptional merchandise which, combined with our ‘1 Pier 1’ strategy, creates an engaging shopping experience. We believe this is an exciting time to be a retailer – we’re seeing a profound shift in the shopping behavior of our customers. Our timely transformation from a brick-and-mortar retailer to one with full omni-channel capabilities has us well positioned to seize upon this change and drive brand growth.”

The company has a conference call scheduled for this morning.

-- Steve Kaskovich




Fewer Fort Worth-Arlington mortgage holders underwater, CoreLogic says

The percentage of FortWorth-Arlington residential properties with a mortgage that is underwater in the first quarter dropped to  3.3 percent from 4.3 percent in the same time period a year ago, according to CoreLogic.

Locally, that means 13,028 residential properties with a mortgage were in negative equity by March 31. Last year, the number was 16,704 properties, said CoreLogic, a global property information, analytics and data-enabled services provider.

In addition, 1.7 percent, or 6,554 residential properties, was in near negative equity in the first quarter, compared to 2.4 percent, or 9,120 in the fourth quarter of 2013, CoreLogic said. 

Nationwide, CoreLogic found that about 6.3 million homes, or 12.7 percent of all residential properties with a mortgage, were still in negative equity as of March 31, compared to 9.8 million homes, or  20.2 percent, a year ago.

Negative equity occurs when borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

"Despite the massive improvement in prices and reduction in negative equity over the last few years, many borrowers still lack sufficient equity to move and purchase a home," said Sam Khater, CoreLogic’s deputy chief economist, in a statement. "One in five borrowers have less than 10 percent equity in their property, which is not enough to cover the down payment and additional costs associated with a conventional mortgage."

_ Sandra Baker


Fort Worth-Arlington existing home prices up 8.7 percent in April

Fort Worth-Arlington existing home prices increased 8.7 percent in April compared to a year ago, according to the latest CoreLogic market report released today.

On a month-over-month basis, local home prices increased by 1.4 percent in April from March, CoreLogic said.

Nationwide, home prices increased 10.5 percent in April, representing 26 months of consecutive year-over-year increases, CoreLogic said.

“Home prices are continuing to rise as we head into the summer months,” said Anand Nallathambi, CoreLogic’s president and CEO. “The purchase market continues to suffer from a dearth of inventory which we expect will continue to drive prices up over the year.”

_ Sandra Baker


First phase of Motorola Mobility layoffs set for August

Flextronics, which operates the Motorola Mobility smartphone assembly plant at Alliance in Fort Worth that will close by year's end, will begin laying off its employees on or about Aug. 1, it says in a notice to the state. Layoffs are expected to be complete by January 2015. The company said 223 of its employees will be affected by the site's closing.

When Motorola Mobility said on Friday that it intended to  shutter the facility, it indicated that about 700 people were working at the 450,000-square-foot plant, down from a high of about 3,500. According to past news reports, a recruiting and staffing services firm, Aerotek, did significant hiring for Flextronics.

Disappointing sales of Motorola's Moto X smartphone, assembled at the plant, led to the move, company officials said Friday. The Fort Worth factory went into full-scale production in August 2013 and held an official opening in September, an affair that was attended by  Texas Gov. Rick Perry and Eric Schmidt, chairman of Google, which owns Motorola. Goggle bought Motorola Mobility in 2012 and in January agreed to sell the handset maker to Beijing-based Lenovo.

-- Jim Fuquay

Texas needs to cut carbon emissions 39 percent under EPA proposal

Carbon emissions from electricity generation would need to decline by 39 percent by 2030 under the U.S. Environmental Protection Agency's proposed greenhouse gas reduction proposal today. The agency on average calls for a 30 percent reduction nationally. Texas would need to reduce its carbon emissions from 1,298 pounds per megawatt-hour, the rate in 2012, to 791 pounds per mw-h. EPA officials said the standards are based on the  2012 "state of the fleet" for each state's generation capacity, taking into account previous efforts to cut emissions through energy efficiency programs, renewable energy standards and other programs. According to EPA, Texas got about half its power in 2012 from natural gas, 32 percent from coal, 7.5 percent from wind and 8.9 percent from nuclear.

"It will be up to the states to define their plans ... to meet the goals," one of several senior EPA officials said on a conference call with reporters this morning. "Ultimately if a state doesn't set a plan the EPA will set one," said another EPA official. It could be a carbon tax or other system, they said, "and states will make their own choices of what makes sense for them."

-- Jim Fuquay


Range Resources CEO was paid $10.6 million last year, among tops in North Texas

Only one Tarrant County CEO appears on a list of 337 chief executives at S&P 500 companies included in a study of executive compensation by The Associated Press and Equilar: Jeff Ventura at Range Resources, the Fort Worth-based oil and gas producer.

Jeff VenturaAccording to an AP database, Ventura's pay package last year totaled $10.6 million, including nearly $8.2 million in stock options and awards. That was 40 percent higher than in 2012.

Two other area oil-and-gas leaders made more: Exxon Mobil's Rex Tillerson, whose $28.1 million pay package ranked him 12th nationwide; and Scott Sheffield at Pioneer Natural Resources, with a package worth $13.25 million.

Here are the North Texas execs on the list.

Rex Tillerson (ExxonMobil, Irving): $28.1 million, up 3 percent

Trevor Fetter (Tenet Healthcare, Dallas): $22.7 million, up 180 percent

Randall Stephenson (AT&T, Dallas): $20.7 million, up 10 percent

Richard K. Templeton (Texas Instruments, Dallas): $13.7 million, up 4 percent

Scott D. Sheffield (Pioneer Natural Resources, Irving): $13.25 million, up 15 percent

David T. Seaton (Fluor, Irving): $12.5 million, down 29 percent

Thomas J. Falk (Kimberly-Clark, Dallas): $11.9 million, down 1 percent

Jeffrey L. Ventura (Range Resources, Fort Worth): $10.6 million, up 40 percent

Larry D. Young (Dr. Pepper Snapple, Plano): $9.03 million, up 6 percent

Mark A. Blinn (Flowserve, Irving): $7.26 million, up 15 percent

Ralph W. Babb, Jr. (Comerica, Dallas): $6.5 million, down 10 percent

Phil Rykhoek, (Denbury Resources, Plano): $6.16 million, up 33 percent

Gary C. Kelly (Southwest Airlines, Dallas): $4.04 million, down 5 percent

-- Steve Kaskovich

Sears laying off 55 at North Beach Street parts center

Sears will idle about 55 workers at a parts and repair center at 5001 N. Beach St. just south of N.E. Loop 820, the retailer said in a notice to the state. It said the layoffs will happen by the end of June and are expected to be permanent. The company, in a later emailed statement, said the facility will remain open, and eligible workers will receive severance and can apply for open positions at Sears and Kmart stores.

-- Jim Fuquay


Will GameStop face the same woes as RadioShack?

An article on the investment website Seeking Alpha raised an intriguing quesiton last week.

“Will GameStop become RadioShack in 15 years or sooner?”

The comparison between Grapevine-based GameStop and Fort Worth-based RadioShack is natural. The consumer electronics retailers have gone in opposite directions in the past decade as GameStop ascended with the popularity of videogames and RadioShack declined as it struggled to adapt to online and big-box competition. With videogames going digital, some wonder whether GameStop can sustain business at its thousands of small stores.

GameStop’s strong first-quarter earnings report last week should reassure investors that the videogame retailer is positioned to weather the industry’s transition to digital content, at least for now. The company’s profit rose 25 percent, sales of digital content are growing and there are aggressive plans to expand two new electronic chains to diversify the business.

GameStop says it’s embracing the digital transformation. In a conference call with analysts, CEO Paul Raines said the company’s digital receipts in the quarter — from sales of digital games and downloadable content — equaled about a third of the sales from physical games. That, he said, is a significant business.

Also, a lot of its digital sales occur in GameStop stores, where customers can use trade credits gained by selling old games or equipment and compile points in the company’s PowerUp rewards program.

Mike Hogan, executive vice president of strategic business and brand development, told the Star-Telegram that many customers still prefer physical games because they don’t space to store a download or they want the residual value of the game so they can sell it in the future.

“We’re interested in selling physical content and we’re interested in selling digital content,” he said. “We want to deliver the consumer the best experience however they want the experience.”

But the Seeking Alpha article, from the firm Valuentum, notes that new systems like Sony’s PlayStation 4 stream both new games and old ones, posing a threat to profitable used-game sales at GameStop stores.

“The physical game market will shrink significantly over the next decade or so, and while it won't go completely away (much like DVDs are still around), it will be much, much smaller,” the analysis said. “GameStop may become the RadioShack of the 2020s decade.”

— Steve Kaskovich

Read more here: http://www.star-telegram.com/2014/05/25/5846798/demolition-of-old-fire-station.html#storylink=cpy


BNSF train derails in Gainesville

BNSF said there would be delays of 24 to 36 hours on its network through northeast Texas after a train loaded with taconite derailed near Gainesville on Tuesday night.

According to KXII News 12, Gainesville police said between 20 and 100 cars went off the track over East Garnett Street around 8:30 p.m. There were no reports of injuries and the train's contents were non-hazardous.

The Fort Worth-based railroad estimated that service on the track would return to normal at 6 a.m. on Thursday.

-- Steve Kaskovich


Bankruptcy notice sent to TXU Energy customers just "informational"

Residents who use TXU Energy for their electricity service have started getting an odd notice concerning Energy Future Holdings, the parent of TXU Energy that filed a Chapter 11 bankruptcy petition last month. The notice talks about filing "proofs of claim" in the case, but as far as residential customers go it's largely " for informational purposes," according to a prepared statement from TXU Energy spokesman Juan Elizondo. He added that "customers may receive other notices during the Chapter 11 process depending on their circumstance."

The notice is a little confusing because the first paragraph starts out saying the recipient got the mailing because "you are (a) a large commercial or industrial customer" of an EFH company. But keep reading, and it goes on to say you also have received it because you're "a residential or small business customer of the Debtors that is subject to an agreement for the sale of electricity ... ."

"In a nutshell, there is absolutely no problem," Elizondo said in a email today. "Business continues as usual and we are honoring all customer contracts and commitments." The notice comes from a company called EPIQ Bankruptcy Services, which specializes in legal paperwork handling and is running the web site where court filings in the EFH bankruptcy are posted.

-- Jim Fuquay


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