Skip to main content

The Globe and Mail

Pier 1 Imports slumps 30%; rivals also drop as holiday optimism disappears

Pier 1 Imports Inc. signage is displayed outside of a store in San Francisco on Tuesday, Sept. 17, 2013.

David Paul Morris/Bloomberg

Pier 1 Imports Inc's stock lost nearly a third of its value on Thursday and its main competitors' shares also fell after the furniture and home decorations retailer warned the holiday shopping season was not going well.

Shares in the seller of wicker chairs and scented candles slumped 30 per cent and was on track for its deepest one-day drop since 2009, while rival Williams-Sonoma Inc fell 3.25 per cent, Bed Bath & Beyond Inc dipped 2.7 per cent and At Home Group declined 1.3 per cent.

Pointing to a strong labour market and rising home prices, many U.S. brick-and-mortar retailers have been cautiously optimistic that consumers would spend more this holiday shopping season than in recent years.

Story continues below advertisement

Pier 1 said in its quarterly report late on Wednesday that holiday shopping got off to a strong start on Black Friday on Nov. 24, helped by strong promotions.

"However, overall trends dropped considerably during the first two weeks of December," warned Chief Executive Alasdair James in a news release. "We have adjusted our promotional plans for the remainder of the holiday season."

Reflecting the "current tone and volatility of business," Pier 1 slashed its fiscal 2018 non-GAAP adjusted earnings-per-share forecast to between 17 cents and 25 cents, down from previous guidance of between 38 cents and 48 cents.

Pier 1's dismal outlook reflects surging competition between sellers of home goods, including online sellers Wayfair Inc and Inc, analysts said. Home decor superstore At Home Group, which held an initial public offering last year, has added to that pressure, and Inc is also a major player in home decor, as it is in other retail sectors.

"That's leading some retailers to have challenges getting traffic into stores, and it's been more pronounced over the past few quarters," said Telsey Advisory Group analyst Cristina Fernandez.

That has led Pier 1 and its competitors to offer nearly permanent discounts, which emaciate earnings. Typing "Bed Bath and Beyond" into a Google search bar on Thursday, the first word that autocompleted was "coupon."

"The problem is that you condition the customer not to buy anything at full price, and it becomes this vicious cycle," said Loop Capital analyst Anthony Chukumba.

Story continues below advertisement

Report an error
As of December 20, 2017, we have temporarily removed commenting from our articles as we switch to a new provider. We are behind schedule, but we are still working hard to bring you a new commenting system as soon as possible. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to