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Pier 1 Imports Q1 profit rises on sales growth

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Pier 1 Imports, Inc. (NYSE:PIR) said fiscal first quarter 2013 earnings rose amid sales growth as average ticket size rose and more shoppers visited their stores.

Earnings rose to $17.8 million, or 16 cents per share. This is up from the year-ago profit of $14.1 million or 12 cents per share. Total sales climbed 7.9 percent to $361.1 million from 334.6 million.

Analysts polled by Bloomberg had expected per-share profit of 16 cents, on $359 million in revenue.

In early morning trade, Pier 1’s share price rose by 32 cents, or 2.05 percent, climbing to $15.90 each on the New York Stock Exchange.

"We’re pleased with the strong sales and earnings performance we achieved this quarter, as well as the continued expansion of our operating margin," Pier 1 chief executive Alex W. Smith said in a statement.

"The results demonstrate the effectiveness of our merchandising strategies and in-store execution, as well as strong full-price selling."

Same-store sales grew by 7.2 percent. This is considered to be a key metric to gauge a retailer’s health because it excludes sales from stores recently opened or closed during the year.

For the period, inventory totalled $333.5 million and was in line with expectations, the company said in a release.

Capital expenditures reached $12.2 million, which were used for new store openings, store fixtures and to improve infrastructure and technology development including the Pier 1’s new e-commerce website. Gross margin edged up by 150 basis points to 41.6 percent from 40.1 percent.

For full-year, the specialty retailer raised its per-share earnings guidance. It now expects to earn roughly $1.08 to $1.14 up from its prior prediction of $1.06 to $1.12.

At established stores, the company expects sales to grow in the mid single-digit range. Capital costs are slated to be around $70 to $75 million.

Quick facts: Pier 1 Imports Inc

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NYSE:PIR
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