(CNN) – (6/27/19) Pier 1 Imports is closing a dozen more stores than originally planned as struggles mount for the retailer.
The home goods company’s stock sank 16% in early trading Thursday after posting another dim earnings report. Sales at stores open at least a year fell 13.5% in the first quarter and the company posted a loss of $81.7 million, which was substantially larger than the $28 million loss it posted in the same quarter a year ago.
Pier 1 also said it’s closing 12 more stores this year. It already announced in April it was shuttering 45 locations.
If the company’s turnaround plan doesn’t work, it could close even more stores, said Interim CEO Cheryl Bachelder on an earnings call Wednesday. Pier 1 has 967 stores remaining.
“If we are unable to achieve our performance goals, sales targets and reductions in occupancies and other costs, we could close up to 15% of our portfolio,” she said.
Pier 1 expects the second quarter to be equally as rough. It aggressively discounted lower-priced, lower-margin items to clear out its inventory. Bachelder said the company wants to improve its offerings in stores, but the clearance sale could hurt profit.
The company lost its previous CEO, Alasdair James, last December after his turnaround plan failed. Pier 1, which is known for its candles and home accessories, has been struggling to compete against online retailers.
The company is in the midst of a plan to save as much as $110 million by the beginning of fiscal 2020. It also plans to establish a “clearer merchandise focus,” including eliminating inventory that isn’t “uniquely Pier 1 merchandise,” the company previously announced.
Last week, Pier 1 initiated a reverse stock split to help it maintain compliance with the NYSE. If it wasn’t for that, it would be a penny stock.