Pier 1 FY 3Q15 Earnings Call Notes

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Alex Smith

Decreases in store traffic

“Our disappointing third quarter sales results are largely attributable to decreases in store traffic. Company comparable sales were essentially flat down slightly on a reported basis and up slightly on a constant currency basis.”

Starting from a low base in traffic, the cadence has been as usual through December

“Starting really with the Thanksgiving weekend, our results over that weekend were pretty much what you heard. People report in the industry, which was very good business online particularly direct to customer and a pull back in store traffic. What’s happened since then is from that sort of lower base if you like, the Christmas cadence is pretty much what we normally see. We’re getting day-over-day, week-over-week growth as we approach the biggest weekend of the year, which is coming up, but it’s still right below last year.”

Everyone is being highly promotional

“Well, I’m sure you will look at these things as closely as we do and it’s everybody and it’s the online only guys, it’s the brick and motor only guys, it’s the high end specialty, it’s the big box guys, it’s the mass merchants, it’s the home improvement guys, it’s everybody. There is not anybody who is not doing substantial discounting, which is unfortunate, but it’s the world we live in.”

Tomorrow is the last day we ship for Christmas

“tomorrow I think or today is the last day we ship for Christmas. So the eCom participation does fall now for the next little while until after Christmas and then it will pick up again in January and that’s obviously just factored into our sales.”

Jeff Boyer

We still think we can get back to high 50s merchandise margin again

“No, I think the long term goal still Budd is to get back, again we mentioned before probably won’t be at that 59%, 60% level that we’ve seen perhaps just given the promotional intensity, but we still think the high 50s is a very, very doable metric for us.’