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UBS Cuts Price Target on Pier 1 Imports (PIR) Following 1Q EPS Miss

June 30, 2016 8:34 AM EDT
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Price: $3.56 --0%

Rating Summary:
    1 Buy, 15 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 8 | New: 41
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UBS reiterated a Sell rating on Pier 1 Imports (NYSE: PIR), and cut the price target to $3.50 (from $4.50), following the company's 1Q earnings report. The company reported EPS of -$0.07 compared to the Street's -$0.05 estimate.

Analyst Michael Lasser commented, "PIR's 1Q highlighted its challenges. Its comp continued to decelerate & ended down -2.5% in 1Q (-2.2% on a currency neutral basis). This compared to our -2% forecast and equated to a -550 bps decel. on a 2-yr stack. Notably, its eComm sales increased 10%, which was a significant slow-down from 1Q'16's ~90%+ growth. Further, its store sales declined ~7%, showing the difficulty it has driving traffic to its physical locations. In addition, PIR saw weak sales in certain higher priced products it introduced in 1Q (though, categories such as outdoor furniture were probably impacted by weather). The most noteworthy point was that its marketing spend increased ~28% YoY (a ~$6 mm rise in its dollar spend) while its sales still declined by ~$19 mm. This suggests there is little it can do to reverse its declining fortunes. As a result, we see downside risk to its shares as it bounced off its recent lows of ~$4 earlier in the year."

For an analyst ratings summary and ratings history on Pier 1 Imports click here. For more ratings news on Pier 1 Imports click here.

Shares of Pier 1 Imports closed at $5.44 yesterday.



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