Pier 1 FY 1Q17 Earnings Call Notes

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Pier 1 Imports’ (PIR) CEO Alexander Smith on Q1 2017 Results

Experiencing same customer trends as everyone else

” clearly we are experiencing the same customer trends as the industry generally, namely the ongoing movement to purchase outside a store. Indeed, our direct-to-customer sales ordered outside the store were up 40% in the first quarter driven by both increased traffic and higher conversion rates on our site.”

Mis-executed in outdoor

“Overall, our topline results in the first quarter were below our plan. We had some categories that performed exceptionally well, tabletop for instance, but that was not enough to pull up our chain average. Our shortfall came principally in outdoor furniture, the result of some new product misses and a reduction in the number of floor models.”

Digital strategy highlighted email, search, display and social

“Now let’s talk about our digital marketing efforts. We are seeing positive results from our initiatives around frequency and retention as well as new customerReturned to TV advertising

“Our return to television advertising commenced in April and we were on air for six weeks during the first quarter. We are on air now for our July 4 One Big Sale and then back again for Fall and Harvest. While it’s still early days we are happy to be back on TV. Our TV ads providers with the opportunity to reinforce our brand messaging, which we have believe will help drive incremental traffic to our Pier 1 Import stores and website. Its full effect of course will be most prevalent during the forthcoming Holiday season.”

It’s not a highly promotional environment, it’s just the environment that we live in

“we said on the last call you know this is no longer a highly promotional environment, it’s just the environment, it’s the world that we live in. So our job is – and by the way I think I said our promotional activity in Q1 was pretty much inline with what we would expected, so our job is as much in some retailers is just to get smarter and smarter about how we use those promotional dollars, make sure that we are only using them on promotional activity that really does drive merchandise margin dollars and not the overexcited by things that drive sales that no margin dollars. ”

Free shipping is a discount like any other

“Well I think you just answered your own question there which is we look at free shipping as just being one of the promotional offers which we can use and we try and balance free shipping along with all the other. I mean free shipping is just another discount and we just look at it alongside all the other discounts opportunities that we have.”‘