Shares of Pier 1 Imports Inc. (NYSE: PIR) plunged on Thursday after a sharp decline in same-store sales contributed to a fiscal fourth-quarter earnings miss, prompting the specialty retailer to halt dividend payments in order to improve its balance sheet.
The stock fell 17.4% to US$2.86 in pre-market trade.
Pier 1 said on Wednesday evening that it earned US$15 mln, or US$0.19 a share, in the fourth quarter, compared with $27mln, or US$0.33 cents a share, in the year-ago period.
The Earnings Whisper number was calling for Pier 1 to bring in adjusted earnings of US$0.20 per share.
The company’s comparable-store sales also fell by 7.5%, which was much steeper than analysts’ expectations of a 2.7% drop.
Pier 1 said that stopping its dividend program “will enable the company to allocate greater resources toward implementing its three-year strategic plan to drive sales and earnings growth and increase shareholder value.”