Pier 1 2016 Annual Report Download - page 4
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4. Fulfillment and home delivery. While planned to grow as our e-Commerce penetration expands, we are pleased to have
seen these costs leverage relative to fulfilled sales. We are also working to offset the impact of fulfillment and home delivery
costs by reducing our store-related expenses.
5. Selling, general and administrative expense. We are carefully controlling costs across all areas of the organization,
particularly as we begin to leverage the investments we’ve made in our omni-channel model. In fiscal 2016, we embarked
on a multi-year project to build further efficiencies into the business.
6. Capital allocation. In recent years, we utilized capital to bolster our infrastructure and invest in areas critical to our
successful omni-channel transformation — technology, stores, supply chain and fulfillment capacity. Fiscal 2016 saw us
lower our capital expenditures meaningfully, by over one-third. As always, we will balance our spending in order to invest
for future growth, with plans to return excess capital to Pier 1 Imports’ shareholders through share repurchases and cash
dividends.
As we reflect on the current state of our beloved company and its potential, we are particularly proud of our omni-channel
capabilities, some of which are well ahead of our peers. We are also pleased with our brand health and competitive positioning.
The Pier 1 Imports name continues to command high marks for brand awareness, and resonates as always: broad, unique
assortments that cover multiple aesthetics; good, quality products that are priced to be affordable; merchandise that allows her
to create her personal style; and products that reflect the artisans who made them — products with a soul. We believe these
underlying strengths will allow us to capture additional market share in the years ahead.
We’re obviously disappointed that our financial results during this transformation have been below our self-established
expectations. As we move forward, we intend to fully exploit our omni-channel capabilities. Fiscal 2017 will see our best
endeavors and judgment used to help drive sales higher, rebuild margins and return to a stable trajectory of profit growth. We
greatly appreciate the ongoing support of our associates, customers and investors. We are committed to achieving flawless
execution against our strategies, improving our financial performance and creating value for our shareholders.
Sincerely,
Alexander W. Smith Terry E. London
President and Chief Executive Officer Chairman of the Board