Pier 1 2014 Annual Report Download - page 25

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
FISCAL YEARS ENDED MARCH 1, 2014 AND MARCH 2, 2013
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 2014 and 2013 were as follows (in thousands):
2014 2013
Stores $1,703,572 $1,676,293
Other (1) 68,171 28,592
Net sales $1,771,743 $1,704,885
(1) Other sales consisted primarily of direct-to-customer sales, wholesale sales and royalties received from Grupo Sanborns and gift card breakage.
Net sales during fiscal 2014 were $1.772 billion for the 52-week period, an increase of 3.9%, from $1.705 billion for the prior
fiscal year (53-week period). The increase in sales for the fiscal year was comprised of the following components (in thousands):
Net Sales
Net sales for fiscal 2013 $1,704,885
Incremental sales growth (decline) from:
New stores opened during fiscal 2014 25,520
Stores opened during fiscal 2013 (1) 54,239
Comparable stores (2) 38,360
Comparable stores for the 53rd week of fiscal 2013 (27,360)
Other, including closed stores (23,901)
Net sales for fiscal 2014 $1,771,743
(1) Includes incremental sales of $39,611 from direct-to-customer sales.
(2) Includes incremental orders placed online for store pick-up of $14,607, and excludes sales at comparable stores during the 53rd week of fiscal 2013.
The total sales growth for fiscal 2014 was primarily the result of an increase in comparable store sales, direct-to-customer sales
and the net increase in the number of stores, partially offset by the 53rd week of sales in fiscal 2013. Comparable store sales
increased 2.4% for the year and were driven by an increase in average ticket and conversion, offset by a decrease in traffic
compared to the prior year. The Company’s net sales from Canadian stores were subject to fluctuation in currency conversion
rates. These fluctuations contributed to a 40 basis point decrease in the comparable store calculation in fiscal 2014 compared to
fiscal 2013. The Company’s e-Commerce sales accounted for 4.0% of total sales for fiscal 2014 compared to approximately 1.0%
for fiscal 2013. E-Commerce sales are comprised of both customer orders placed online which were shipped directly to the
customer from a fulfillment center (“direct-to-customer”) and those picked up by the customer at a store location (“store pick-up”).
The Company’s proprietary credit card program provides both economic and strategic benefits. Sales on the Pier 1 rewards
credit card comprised 30.4% of U.S. store sales compared to 25.7% last year. As of March 1, 2014, the Company operated
1,072 stores in the United States and Canada, compared to 1,062 stores at the end of fiscal 2013.
A summary reconciliation of the Company’s stores open at the beginning of fiscal 2014, 2013 and 2012 to the number open at
the end of each period is as follows (openings and closings include relocated stores):
United States Canada Total
Open at February 26, 2011 967 79 1,046
Openings 13 2 15
Closings (9) — (9)
Open at February 25, 2012 971 81 1,052
Openings 22 — 22
Closings (11) (1) (12)
Open at March 2, 2013 982 80 1,062
Openings 26 1 27
Closings (17) — (17)
Open at March 1, 2014 (1) 991 81 1,072
(1) The Company supplies merchandise and licenses the Pier 1 Imports name to Grupo Sanborns, which sells Pier 1 Imports merchandise primarily in a “store within a store” format. At the end
of fiscal 2014, there were 56 of these locations in Mexico and one in El Salvador. These locations are excluded from the table above.
PIER 1 IMPORTS, INC. 2014 Form 10-K 21