Pier 1 Imports, Inc. Reports First Quarter Financial Results

Pier 1 Imports, Inc. Reports First Quarter Financial Results

Pier 1 Imports, Inc. (NYSE:PIR) today announced a net loss from continuing operations of $56,378,000, or $0.64 per share, for the first quarter ended June 2, 2007. Total sales declined 5.2% for the first fiscal quarter to $356,375,000 from $376,092,000 in the year-ago quarter, and comparable store sales declined 5.4%.

First Quarter Operating Results

During the first quarter, merchandise margins declined to 45.5% as a direct result of the Company’s aggressive liquidation of modern craftsman merchandise. Excluding the estimated impact of the aggressive markdown strategy, merchandise margins for the quarter would have approximated 52.2% compared to 53.8% last year. Store occupancy costs remained flat compared to the year ago quarter. Selling, general and administrative expenses declined $15.5 million from the year ago period, and were 37.1% of sales compared to 39.2% of sales last year. The primary drivers of the decrease in costs were savings of approximately $9 million in marketing expense, $6 million in store payroll, and $4 million in other general administrative costs when compared to the same period last year. These cost savings were partially offset by one-time and unusual charges of $3.5 million related to severance and outplacement costs incurred with the Company’s previously announced reduction in force. Excluding the impact on merchandise margins and the one-time charge discussed above, management believes the pre-tax loss for the first quarter would have been more in line with the pre-tax loss for the year ago period.

Return to Profitability

Alex W. Smith, the Company’s President and Chief Executive Officer, said, “Earlier this year, we outlined six key business priorities aimed at returning Pier 1 Imports to profitability and beyond. As planned, our results for the first quarter reflect the impact of charges that are a direct result of the speed with which we are executing our strategy. I look forward to today’s conference call and updating you on our progress.”

Conference Call Information

The Company will host a conference call to discuss the 2008 first quarter results at 10:00 a.m. Central Time today. A web cast is available on the Company’s website at www.pier1.com linking through to the “Investor Relations” page and the “Events” page, or you can dial into the conference at 1-800-498-7872 or if international dial 1-706-643-0435 and the conference ID number is 1054295. The teleconference will be held in a “listen-only” mode for all participants other than the Company’s current sell-side analysts and buy-side investors.

The replay will be available at about 12:00 p.m. (Central) for 24 hours and replay access can be dialed at 1-800-642-1687 or if international dial 1-706-645-9291 and reference the conference ID number 1054295.