Why Pier 1 Imports, Inc. Shares Dropped

Why Pier 1 Imports, Inc. Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Pier 1 Imports, were getting cast overboard today, falling 12% after the company gave a disappointing holiday sales update.

So what: The home-furnishings seller said comparable sales increased 1.3% in the five-week period ended January 4, 2014, lower than the company had hoped for, prompting it to cut its guidance for the quarter and the full year. Pier 1 said it now expects earnings of $0.47-$0.52 per share down from $0.60-$0.66 on flat same-store sales. Full-year EPS guidance was lowered by a similar amount to $1.07-$1.12.

Now what: Remarking on the slow holiday sales, CEO Alex Smith said, "We're extremely disappointed that December sales came in well below our expectations, especially considering our holiday selling season kicked off with a record post-Thanksgiving weekend." Smith blamed the shortfall partly on wintry weather, saying it put a dent in store traffic. Blaming the weather may seem like a cop-out, but Smith pointed out that sales were stronger in the Southeast and California. I wouldn't be too concerned about the holiday miss, as shares remain affordably priced, and the company figures to benefit from the recovery in the housing market.

Get 2014 started off right
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

The article Why Pier 1 Imports, Inc. Shares Dropped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published