Pier One 3Q14 Earnings Call Notes

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. Full transcripts can be found at Seeking Alpha

Almost done with the omni-chanel investment phase

“As each quarter goes by, we get nearer to the point when we will view our omni-channel capabilities to be sufficient to claim transition is complete. From that point on, we expect to see progressive improvement in our operating ratios.“
Strong September, weak October, good November though
“After strong start in September, our third quarter sales were somewhat softer than anticipated, primarily reflecting the weak traffic patterns in October. We saw meaningful improvements in November, which finished particularly strong with our five-day events surrounding Thanksgiving.

Cross channel traffic is driving synergistic sales

“The website is driving store traffic. The fast-growing numbers of customers who shop both online and in store is very encouraging as they spend more than online only or store-only customers. Also the fact that 30% of online sales originate in the stores, means stores are driving traffic to the web, two mutually supportive and independent vehicles that’s the beauty of 1 Pier 1.

No impact from west coast port delays

“delays of the West Coast ports have had no impact on our sales, but we continue to closely monitor the situation.

Strong first half of December

“Well, as we said we had a strong half to the month, but of course, as you know we are only half way through December in terms of the volume. So we feel good the way we are positioned.

No sign of retreat from promotional environment as of now

“If I try to give it a sort of a vanilla answer, I’d say we don’t see anything very significantly different than we’ve seen in the last number of years frankly. I mean, it became a while ago a very promotional environment. And there is no sign yet that the customers retreating from that.

Closing stores because of omni-channel

“I think what you see it is a precursor to us thinking differently about our store base as we get to really understand the whole ramifications of our omni-channel strategy. And you’re going to have to bear with us on this because we’re learning everyday. By the end of the fourth quarter, we’ll be a lot smarter.

Fulfill to store obviously costs less than fulfill to home

“Well, fulfilling to the home is obviously more expensive than fulfilling to the store. I mean, you’re absolutely right from that. But we expect the fulfillment cost per item to the home also to decrease over time because we’re going to get the efficiencies of throughput in the fulfillment center, number one and we will get as much about all those costs so. And then we have to offset that what we get in delivery revenue for each of those orders that we fulfill to the home