Pier 1 Imports (NYSE:PIR) announced disappointing sales this week, but the furniture and home decor retailer is confident that its continued investment in omnichannel will give it a boost in the coming year.
The company announced a net income of $9.2 million for its second quarter, down from $17.8 million a year ago, attributing that drop, in part, to the cost of investment in omnichannel growth. Those investments seem fruitful so far. The rate of growth for the company's e-commerce sales remains high, with sales penetration of nearly 10 percent last quarter.
"With the acceleration of investments in our '1 Pier 1' omnichannel strategy, we expect this momentum to continue," said Alex Smith, president and CEO. "These incremental investments are impacting our near-term financial performance as anticipated, as we rapidly evolve into our new business model."
In the relatively short time that Pier 1 has started making an effort to improve its digital sales, growth has been impressive. Last year, online sales accounted for around 1 percent of total sales for fiscal 2013, quadrupled to 4 percent in fiscal 2014, and more than doubled to reach 9 percent last quarter, the first quarter of fiscal 2015.
Smith predicted that e-commerce sales would total $400 million in a year, enough to boost top line growth for the retailer even if store traffic doesn't improve. Pier 1 already allows shoppers to place orders on in-store PCs, which account for about a quarter of e-commerce sales. However, in-store pickup is also becoming a popular option as it now accounts for one-third of Pier.com order fulfillment.
The chain plans to roll out 600 tablets to stores by the end of October, as well as convert all six of its distribution centers to distribution/fulfillment centers by the second quarter of its 2016 fiscal year, adding to the two e-commerce fulfillment centers it currently operates.
-See this Pier 1 press release
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