Pier 1 Imports reported financial results for the third quarter ended November 26, 2016.
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Net sales for the third quarter of fiscal 2017 decreased 0.4% to $475.9 million, compared to $478.0 million in the same period last year.
At the end of the third quarter of fiscal 2017 the company operated 33 fewer stores than at the end of the third quarter of fiscal 2016. company comparable sales for the quarter increased 1.8% from the prior year.
E-commerce sales totaled $97.4 million, representing year-over-year growth of approximately 28%. E-Commerce represented approximately 20% of net sales in the third quarter, as compared to approximately 16% of net sales in the third quarter of fiscal 2016.
Gross profit for the third quarter of fiscal 2017 totaled $196.4 million, or 41.3% of net sales, compared to $184.0 million, or 38.5% of net sales, in the third quarter of fiscal 2016.
Third quarter merchandise margin (the result of adding back delivery and fulfillment net costs and store occupancy costs to gross profit) totaled $286.4 million, or 60.2% of net sales, compared to $268.6 million, or 56.2% of net sales, in the third quarter of fiscal 2016.
The year-over-year improvement in merchandise margin as a percentage of net sales is primarily attributable to a more cost efficient promotional strategy and improved operations within the company’s distribution centers.
For the three months ended November 26, 2016, contribution from operations (gross profit less compensation for operations and operational expenses) totaled $111.4 million, compared to $97.6 million during the same period last year. As a percentage of net sales, contribution from operations increased 300 basis points to 23.4% in the third quarter of fiscal 2017.
Third quarter fiscal 2017 selling, general and administrative (SG&A) expenses were $160.8 million, or 33.8% of net sales, compared to $151.6 million, or 31.7% of net sales, in the year-ago period.
Cost reductions across the organization were offset by planned investments in marketing, including television advertising, approximately $8.0 million of costs associated with the departure of the company’s CEO, and approximately $3.7 million for incremental legal and advisory fees, CEO transition costs including search fees and retention program awards to executives, and certain costs for sub-leasing portions of the corporate headquarters. ■