Pier 1 Imports

1
Pier 1 Imports

• Analyst Todd Shipp

2
Brief History

• Started in 1962
• Bought Cargokids in 2001
• In 2003, opened 1000th North American store

3
Products/Services

• Pier 1 Imports, Inc. is a specialty retailer that
  operates three chains of retail stores operating
  under the names Pier 1 Imports, The Pier and
  Cargokids. The Company sells a variety of
  furniture, decorative home furnishings, dining
  and kitchen goods, bath and bedding accessories
  and other specialty items for the home.
• Offer a world of choices around 4,000 products
  from over 40 countries
• Cargokids operates stores that sell childrens
  home furnishings and decorative accessories
• Merchandise Sales Mix

4
Locations

• 1083 stores in United States and Canada
• 20 stores in Mexico
• 7 stores in Puerto Rico
• 29 stores in the U.K.
• 40 Cargokids
• 1179 stores worldwide

5
SWOT Analysis

• Strengths
• Marvin J. Girouard has been with company for 30
  years and has been CEO for 5 years
• Continuous expansion of stores
• Cargokids
• Increased sales by 47.2
• March 2004-acquired expertise from Thom Filicia,
  who is one of the top interior designers in the
  country and founder of New York design firm, Thom
  Filicia Inc.
• Enhanced the Bridal and Gift Registry by allowing
  customers to create bridal and gift registries
  online.
• E-commerce revenues increased 35, and gift cards
  48

6
Strengths (cont.)

• Beginning this spring, we have increased our new
  product introductions arriving in stores to offer
  merchandise that is fresh, unique and exciting to
  customers throughout the year. Our plan is to
  launch six distinct, new merchandise
  introductions-up from four traditional spring,
  summer, fall and holiday merchandise seasons in
  years past. This offering will provide a more
  frequent flow of new products and collections
  through the year, which will grow as high as 75
  of products represented in Pier 1 stores.
• Dividends are increasingwent from .24 a year ago
  to .40 now
• Repurchased 3.8 Million shares of common stock
• Over the past 7 years, repurchased more than 25
  million shares

7
SWOT Analysis (cont.)

• Weaknesses
• Introduction of new, unproven merchandise
• Net income decreased from 129 million to 118
  million
• Diluted earnings per share was down 5 from 1.36
  to 1.29
• Due to increase in fixed store costs which
  increased from 12.4 of sales to 13.3

8
SWOT Analysis (cont.)

• Opportunities
• Cargokids
• Introduction of new merchandise
• New ideas of interior design
• Plan to open 150 Pier 1 stores and 20 Cargokid
  stores, while closing 40 Pier 1 stores
• Overall goal is to have 1500 N. American stores
• Threats
• Increased competition
• Economy

9
Competitors

• BBBY Bed Bath Beyond Inc
• Market cap 12.30 B
• CPWM Cost Plus Inc
• Market cap 713.67 M
• WSM Williams-Sonoma Inc
• Market Cap 4.31 B
• LIN Linens 'N Things Inc
• Market cap 1.16 B
• TGT Target Corp
• Market cap 46.88 B

10
5-Year Chart
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1-Year Comparison
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5-Year Comparison
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Key Stats

• 52 week range15.36 - 26.29
• Intrinsic Value 25.34
• Current Price 18.35
• Purchase Price 24.91
• Initial Cost 3736.50
• Current Market Value 2752.50
• Money Lost 984
• 150 Shares Owned

14
Recent Headlines

• Earnings report on December 14, 2004
• Analysts