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Is Pier 1 done? Discounts skyrocket as company executes reverse stock split

7 months ago by James Mattone in Markets

Update: The earnings are in...

... and it looks worse than we thought.

The company reported a net loss of $81.7 million, or -$19.97 per share. Zachs Investment Research predicted a -$13 EPS, for comparison.

Net sales for the company fell by 15.5% to $314.3 million, and a 13.5% drop in comparable store sales.

Keeping in mind our data trends, discounting products at average of 19% might have just eaten into those earnings. Given the company's reverse stock split and this interesting earnings report, it's not looking too well over at Pier 1 Imports

FULL STORY:

Data trends indicate that Pier 1 Imports ($NYSE:PIR) may be an upcoming victim of what some like to call the "retail apocalypse".

The retail home furniture outlet just executed a 1-for-20 reverse stock split on June 20, as the company was in danger of being delisted due to public shares trading below a dollar.

Meanwhile, according to price-discount data that we track from the Pier 1 Imports website, the company appears to be clearing out inventory as of last month.

During mid-May, products discounted on Pier 1's website were done so at an average discount rate of over 22%. That's the highest average percentage discount that we've seen on the company's website since we started tracking the data in April 2016.

This also doesn't come at a time where there are only a few products being discounted at high rates; in mid-May, there were over 25,000 products listed with a discount (i.e., we filtered out products on the website that had a discount of 0%).

During mid-May, products discounted on Pier 1's website were done so at an average discount rate of over 22%. That's the highest average percentage discount that we've seen on the company's website since we started tracking the data in April 2016.

Although the number of products discounted and the average percentage discount dropped slightly — to around a 19% average discount on 11,000+ products today — this is still a significant change in how the company is handling its inventory.

It also comes as Pier 1 is still hemorrhaging stores in an attempt to not sink into the ocean. In April, it reported that it may close up to 145 stores after another quarter of loss, with the store seeing a net sales decrease of 19.5%.

And, just to note, the CFO abandoned ship right around this time too.

This is also happening while Pier 1 is among several furniture retailers trying to pressure President Donald Trump into avoiding additional tariffs on Chinese goods. Among the tariffs are ones for wood and steel items, specifically wicker and bamboo baskets... Items that you'd find at Pier 1. The Dallas News reported last year that the retailer shipped in the majority of its products — 59 percent, specifically — from China.

Given consistent losses, store closures, and the discount data from its website, all in the face of an escalating trade war, Pier 1 is showing trends that are eerily similar to other companies that sunk amid the retail apocalypse.

About the Data: 

Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

Further Reading: 

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James Mattone

James is the Associate Editor at Thinknum Media, mainly covering video games, food, and tech news, but not afraid to head into Sephora or beauty brands if need be...

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