Pier 1 Imports reported financial results for the third quarter ended November 28, 2015. Net income was $10.9 million, or $0.13 per share.
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This compares to last year’s third quarter net income of $17.9 million, or $0.20 per share.
Total sales for the third quarter decreased 2.5% (a 1.4% decrease on a constant currency basis after adjusting for a 110 basis point impact attributable to the year-over-year decline in the value of the Canadian Dollar, relative to the U.S. Dollar) to $472.5 million, compared to $484.5 million in the same period last year.
company comparable sales decreased 0.7% (a 0.5% increase on a constant currency basis).
Merchandise margin (the result of adding back delivery and fulfillment net costs and store occupancy costs to gross profit) in the third quarter totaled $263.1 million, or 55.7% of total sales, compared to $288.2 million, or 59.5% of total sales in the third quarter of fiscal 2015.
The year-over-year decline is primarily attributable to inventory related inefficiencies within the company’s distribution center network (approximately 200 basis points) and promotional activity (approximately 100 basis points). Gross profit in the third quarter totaled $178.5 million, or 37.8% of total sales, compared to $204.9 million, or 42.3% of total sales in the third quarter of fiscal 2015.
For the three months ended November 28, 2015, contribution from operations (gross profit less compensation for operations and operational expenses) totaled $97.6 million, compared to $116.3 million during the same period last year.
Fiscal 2016 third quarter selling, general and administrative (“SG&Aâ€) expenses were $146.1 million, or 30.9% of total sales, compared to $160.8 million, or 33.2% of total sales in the year ago period.
A portion of the year-over-year decline in marketing expense in the third quarter is attributable to a timing shift into the fourth quarter. The following table details the breakdown of SG&A expenses for the third quarter of fiscal 2016 as compared to the same period last year (in millions). ■