Pier 1 Imports CEO is Out
Steve’s breakdown: His last day in December 31st so we expect advertising to stay the course until after the Holidays. That’s the time to pounce.
FORT WORTH, TX: After a string of sales decline, Pier 1 Imports Inc. (NYSE: PIR) appears to have come to a point where it feels that a change of guard at the top could help reverse the trend. However, not everyone sees things that way, which is why several analysts on Wall Street have downgraded the stock in the wake of leadership change announcement.
Besides the matter of leadership uncertainty pending the exit of the CEO who has been around since 2007, Pier 1’s F2Q2017 offered another reason to be worried about the company’s prospects.
Can a new CEO reverse sales trend?
Pier 1 Imports Inc (NYSE: PIR) said its CEO Alex Smith will step down at the end of this year, relinquishing his role as president of the company as well. On top of that, Mr. Smith will cease to be a member of the board of Pier 1.
The company didn’t reveal why Mr. Smith was leaving, but said that it was in the process of hiring a new CEO. The exit of Mr. Smith is coming at a time when Pier 1 is struggling with declining sales and profitability. Though Terry London, the chairman of Pier 1’s board, seemed to praise Mr. Smith’s leadership, it peers there is a feeling within the board that perhaps a new leader could help steer the company to growth.
Downbeat F2Q results – Pier 1 Imports Inc (NYSE: PIR)
The announcement of Mr. Smith’s exit coincided with the release of Pier 1 Imports Inc (NYSE: PIR)’s F2Q2017 preliminary results. As it has been in the recent quarters, the company reported that sales fell 6.7% YoY, though analysts were expecting sales to only decline 6%. In the same quarter last year, sales fell 2.7%.
As for the bottom-line, Pier 1 sees F2Q EPS loss in the band of $0.05 to $0.06, steeper than EPS loss of $0.03 that analysts were expecting and a far cry from EPS profit of $0.04 in the like quarter last year.
The results continued to highlight sales struggles at Pier 1 Imports Inc (NYSE:PIR).
What’s Wall Street saying?
Pier 1 Imports Inc (NYSE: PIR) stock has been downgraded at several rating firms on Wall Street. Analysts at Credit Suisse downgraded the stock to UNDERPERFORM from NEUTRAL and trimmed their price estimate to $4 from $4.50 while citing downbeat F2Q results for the downgrade action.
Pier 1 was also downgraded at Oppenheimer and Raymond James. The analysts at Oppenheimer cut their rating on the stock to PERFORM from OUTPERFORM while maintaining $6 price target, citing industry weakness and leadership uncertainty for the move. At Raymond James, they lowered rating on PIR to Market Perform from Strong Buy, citing industry weakness.