Pier 1, Sherwin-Williams, Southwest issue profit and sales warnings on hurricanes, earthquakes
By Tonya Garcia, MarketWatch
One company that operates in the affected regions says it wasn't impacted at all
Pier 1 Imports Inc., Sherwin-Williams Co., and Southwest Airlines Co. have warned that Hurricanes Harvey, Irma, and Maria, as well as earthquakes in Mexico, will hurt results in the coming quarter.
Pier 1 (PIR) reported second-quarter earnings after hours on Wednesday, with company executives saying that hurricanes in Texas and Florida were going to push down same-store sales in the third quarter by about two percentage points.
About 125 locations in Texas, Florida and eight other states experienced closures from late August to mid-September. All but one store have since reopened, but traffic is "soft" in a number of markets, according to remarks from Chief Executive Alasdair James in a FactSet transcript of the earnings call.
Pier 1 expects a third-quarter same-store sales decline of 2% to flat, a sales decline of 1% to 3%, and earnings per share of 8 cents to 14 cents. The FactSet consensus was for a same-store sales decline of 0.5%, sales of $469 million, down 1.4% from $475.9 million, and EPS of 12 cents.
Pier 1 has a number of problems that are unrelated to the weather. While it beat FactSet expectations, the home décor company still reported a 5-cents-per-share loss in the second quarter (http://www.marketwatch.com/story/pier-1-shares-fall-as-company-posts-wider-quarterly-loss-2017-09-27).
UBS analysts led by Michael Lasser say Pier 1 is cannibalizing its store customers with its e-commerce efforts, tamping down top-line growth. And initiatives to broaden its brand appeal will take time to generate results. UBS rates Pier 1 shares sell with a $3.50 price target.