Pier 1 2009 Annual Report Download - page 29

Overview of Business
The Company’s key financial and operational indicators used by management to evaluate the
performance of the business include the following (trends for these indicators are explained in the
comparative discussions of this section):
Key Performance Indicators 2009 2008 2007
Continuing operations:
Total sales decline ..................................... (12.6)% (6.9)% (8.6)%
Comparable stores sales decline ........................... (9.2)% (1.7)% (11.3)%
Sales per average retail square foot ........................ $ 149 $ 164 $ 168
Merchandise margins as a % of sales ....................... 49.0% 48.5% 47.9%
Gross profit as a % of sales .............................. 27.5% 29.1% 29.2%
Selling, general and administrative expenses as a % of sales ...... 34.3% 32.3% 40.0%
Operating loss from continuing operations as a % of sales ........ (9.1)% (5.8)% (13.9)%
Loss from continuing operations as a % of sales ............... (9.8)% (6.4)% (14.0)%
Inventory per retail square foot ........................... $ 37 $ 47 $ 39
Total retail square footage (in thousands) .................... 8,586 8,782 9,230
Total retail square footage growth (decline) .................. (2.2)% (4.9)% (1.9)%
Stores included in the comparable store sales calculation are those stores that were opened prior
to the beginning of the preceding fiscal year and are still open. Also included are stores that were
relocated during the year within a specified distance serving the same market, where there is not a
significant change in store size and where there is not a significant overlap or gap in timing between
the opening of the new store and the closing of the existing store. Stores that are expanded or
renovated are excluded from the comparable store sales calculation during the period they are closed
for such remodeling. When these stores re-open for business, they are included in the comparable store
sales calculation in the first full month after the re-opening if there is no significant change in store
size. If there is a significant change in store size, the store continues to be excluded from the
calculation until it meets the Company’s established definition of a comparable store. Comparable store
sales in fiscal 2010 are anticipated to include all stores, however, stores closed during the year will be
excluded after they are closed.
FISCAL YEARS ENDED FEBRUARY 28, 2009 AND MARCH 1, 2008
Net Sales
Net sales consisted almost entirely of sales to retail customers, net of discounts and returns, but
also included delivery revenues and wholesale sales and royalties. Sales by retail concept during fiscal
years 2009, 2008 and 2007 were as follows (in thousands):
2009 2008 2007
Stores ............................. $1,308,331 $1,486,147 $1,590,854
Direct to consumer .................... — 8,366 18,943
Other(1) ............................ 12,346 17,319 13,419
Net sales .......................... $1,320,677 $1,511,832 $1,623,216
(1) Other sales consisted primarily of wholesale sales and royalties received from franchise
stores, Grupo Sanborns, S.A. de C.V., other third parties and gift card breakage.
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