Pier 1 Imports reported financial results for the fourth quarter ended February 25, 2017.
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Net sales for the fourth quarter of fiscal 2017 decreased 2.6% to $528.4 million, compared to $542.3 million in the same period last year.
Company comparable sales for the quarter increased 0.2% from the prior year. E-Commerce sales totaled $103.1 million, representing year-over-year growth of approximately 28%.
E-Commerce represented 19.5% of net sales in the fourth quarter, as compared to approximately 15% of net sales in the fourth quarter of fiscal 2016.
Gross profit for the fourth quarter of fiscal 2017 totaled $206.9 million, or 39.2% of net sales, compared to $196.9 million, or 36.3% of net sales, in the fourth quarter of fiscal 2016.
Fourth quarter merchandise margin (the result of adding back delivery and fulfillment net costs and store occupancy costs to gross profit) totaled $299.5 million, or 56.7% of net sales, compared to $284.8 million, or 52.5% of net sales, in the fourth quarter of fiscal 2016.
The year-over-year improvement in merchandise margin is primarily attributable to decreased clearance, a more effective promotional strategy and improved operations within the company’s supply chain.
For the three months ended February 25, 2017, contribution from operations (gross profit less compensation for operations and operational expenses) totaled $118.5 million, compared to $103.5 million during the same period last year.
As a percentage of net sales, contribution from operations increased 330 basis points to 22.4% in the fourth quarter of fiscal 2017.
Fourth quarter fiscal 2017 selling, general and administrative (SG&A) expenses were $148.5 million, or 28.1% of net sales, compared to $150.3 million, or 27.7% of net sales, in the year-ago period.
Cost reductions across the organization were offset by incremental investments in marketing, approximately $2 million of costs associated with the departure of the company’s former CEO, and approximately $2 million of costs related to 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.
Net sales for the twelve months ended February 25, 2017, were $1.828 billion, a decrease of 3.4% from the same period last year. company comparable sales for the twelve months ended February 25, 2017, decreased 1.0% from the year-ago period.
For the same period, e-Commerce represented approximately 20% of net sales, compared to approximately 16% for the twelve months ended February 27, 2016.
Gross profit for the twelve months ended February 25, 2017, totaled $697.3 million, or 38.1% of net sales, compared to $705.0 million, or 37.3% of net sales for the twelve months ended February 27, 2016.
Merchandise margin for the twelve months ended February 25, 2017, totaled $1.048 billion, or 57.3% of net sales, compared to $1.046 billion, or 55.3% of net sales for the same period last year.
For the twelve-month period ended February 25, 2017, contribution from operations totaled $360.1 million, compared to $354.3 million during the same period last year.
As a percentage of net sales, contribution from operations improved 100 basis points year-over-year, to 19.7%.
SG&A expenses for the twelve months ended February 25, 2017, were $587.8 million, or 32.1% of net sales, compared to $578.8 million, or 30.6% of net sales during the same period a year ago.
Cost reductions across the organization were offset by incremental investments in marketing, approximately $10 million of costs associated with the departure of the company’s former CEO, and approximately $7 million of costs related to 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. ■