Pier 1 2012 Annual Report Download - page 26

The Company remains committed to evolving into a multi-channel retailer. In the first half of fiscal 2012,
the Company launched Pier 1 To-Go, the initial phase of the Company’s e-Commerce initiative, which allows
customers to order and reserve merchandise online for pick up and payment at any of the Company’s stores. The
Company continues to make investments to improve its online presence and e-Commerce functionality as it
prepares for the launch of Pier 1 To-You in late July 2012. Pier 1 To-You is the Company’s site-to-customer
initiative which will allow customers to purchase merchandise online and choose from multiple delivery options.
The Company is also implementing a new point-of-sale (“POS”) system and plans for an initial rollout in fall
2012, followed by an all store rollout post-holiday. The new POS system is an important component of the
Company’s e-Commerce initiative and is expected to facilitate a seamless transaction across all shopping
channels by summer 2013.
The Company’s initial share repurchase program was completed on September 6, 2011, resulting in the
repurchase of approximately 8% of the Company’s common stock outstanding. A total of 9,498,650 shares of its
common stock were repurchased at a weighted average cost of $10.53 per share for a total cost of $100.0 million.
On October 13, 2011, the Company’s Board of Directors authorized a new $100 million share repurchase
program.
As a result of the Company’s strong financial performance during fiscal 2012, the Company announced a
new three-year growth plan on April 5, 2012. In conjunction with the new three-year plan, the Company elevated
its financial goals and now expects to achieve sales of $225 per retail square foot and an operating margin of at
least 12% by fiscal 2015. In addition, the Company maintains that online sales will contribute at least 10% of
total revenues by fiscal 2016.
The key objectives under the new plan include investing $200 million in capital over the next three years
as the Company continues evolving into a multi-channel retailer. Investments include building a best-in-class e-
Commerce platform and implementing a new POS system, improving the Company’s store portfolio, and
strengthening the Company’s infrastructure through investments in technology. The plan also includes returning
value to shareholders through share repurchases and quarterly cash dividends.
Over the next three years, the Company will continue to invest in new store openings, store remodels,
new merchandise fixtures, lighting upgrades, and other leasehold improvements. Additionally, the plan also
includes strategic store relocations in major markets where increased sales productivity and store profitability
opportunities exist. In addition to investments related to e-Commerce and POS, the Company’s new growth plan
also includes investments in technology and systems to continue improving processes, efficiencies, and analytics
throughout the organization.
As of February 25, 2012, no shares had been repurchased under the Company’s current share repurchase
program and $100 million remained available for repurchase. Subsequent to year end, the Company utilized a
total of $15.2 million to repurchase 845,400 shares of the Company’s common stock at a weighted average price
per share, including fees, of $17.93 and as of April 20, 2012, $84.8 million remained available for repurchase
under the program. In addition, on April 5, 2012, the Company’s Board of Directors declared a $0.04 per share
quarterly cash dividend on the Company’s outstanding shares of common stock as of April 18, 2012, which is
payable on May 2, 2012.
The following discussion and analysis of financial condition, results of operations, and liquidity and
capital resources should be read in conjunction with the accompanying audited Consolidated Financial
Statements and notes thereto which can be found in Item 8 of this report. Fiscal years 2010, 2011, and 2012 were
all 52-week years, however, fiscal 2013 will be a 53-week year.
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