Pier 1 Imports 2013 Analyst Day Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

$PIR Analyst Day Notes

“Today, we have on average well over 6,000 SKUs in each store. That’s a lot. We believe we could help increase SKU productivity and make the store easier to merchandise and shop, by making a modest reduction in the number of SKUs in each store.”

“25% of our customers are researching their purchase options online before they go into a store. Some customers want to have the convenience of online shopping and some customers want to come in and experience the merchandise.”

“In addition to building on the business of our current department, we can also explore new categories online. For example, our bedding category launched as an online-only offering in March without any fan fair or marketing. We started receiving orders immediately and it was successful in a relatively short period of time.”

“We love our customers. We think of our customer first in everything we do. We know who she is and what she wants.”

“Our field leaders visit stores frequently and are able to do so because we have kept our span of control reasonable. In fact, we have moved the ratio of 14 to one four years ago down to a highly effective span of 11 to one today.”

“Our core customer is between the ages of 25 and 55, with an average household income of around $80,000 and 75% own a home.”

“Pier 1 Imports must reflect a consistent brand message through all points of contact, ensuring we stand out in all channels before our customer even enters our store or website. We know we must provide the right balance of print, online, direct, social, and mass media to keep in the competitive set of her favorite brand.”

“For fiscal 2014, we planned a 30% increase in the number of weeks on air, bringing us to 49 weeks of the year, ensuring that we have a consistent presence on key targeted cable networks.”

“As many of you already know, we began a new partnership with Alliance Data last spring. Shortly after the transition, new cards are reissued to the cardholders and our loyalty program was re-launched.”

“Today, we have more than 1 million active reward cardholders”

“technology is becoming less expensive and more efficient all at the same time. By carefully replacing legacy systems with modern systems, we are reducing operating expenses and improving our capabilities simultaneously.”

“Through the use of cloud technology, we can deploy new systems approximately 30% faster than the traditional model.”

“Our major IT initiative in fiscal 2014 is the implementation of a new point of sales system at all of our Pier 1 import stores…Over time, we will integrate our POS system with Pier1.com offering seamless transactions for our customers, from cash and carry, to order online, to pick-up in store to home delivery. The POS system and the website will work together, seamlessly.”

“Today, our logistics model is a fairly simple one. In essence, we ship products directly from our vendors to our distribution centers and then to our stores. In order to support the growth of our business, we plan to build greater flexibility into our distribution network, allowing us to offer our customers multiple delivery options. Whether she purchases in-store or online, we’ll have the ability to ship directly to her or to her local store however she chooses.”

“we have found that even small investments in lighting can have a significant impact from the productivity of the store. Improved lighting effectively showcases the products by bringing out the merchandised quality, uniqueness and value along with enhancing the shopping experience for our customers.”

“as we get closer to sales per square foot of $225 and drive operating margins at 12% of sales, you’ll begin to hear us discuss in greater depth how we believe we can drive the business to sales per square foot up $250 and beyond. You’ll hear us talk about getting to an operating margin of 13% and 14% as we continue to effectively leverage expenses.”