Retailers across the United States have been plummeting, making them collectively one of the worst choices for stock investors as the sector overall continues to struggle.
Monday saw another major retailer plummet following a one-for-twenty stock split. Pier 1 Imports (NYSE: PIR) fell drastically, losing almost one-third of its stock price.
The reason Pier 1 had to do a reverse stock split in the first place was to make sure that the company could still list on the New York Stock Exchange as per the minimum share price listing rule.
With the stock having already fallen below the minimum $1-per-share mark, the company’s management team had few other options as investor sentiment surrounding the company has never been worse.
It goes without saying that this is already a terrible sign for the company, which has effectively lost almost 98 percent of its original stock price over the course of the past five years.
Earlier in the year, analysts speculated that a liquidation of the once great retailer is a realistic possibility. “Given the trends in business, and its negative earnings per share, EBITDA [earnings before interest, tax, depreciation and amortization], and free cash flow, we see Pier 1 and its $1.6 billion in revenues as potentially at risk of needing liquidation if trends don’t improve,” wrote KeyBanc Capital Markets analyst Bradley Thomas according to MarketWatch.
Even the management team of Pier 1 Imports admitted in their last quarterly earnings report that they were partially to blame for the company’s decline. Interim CEO Cheryl Bachelder even went so far as to say that the company’s wounds were “predominantly self-inflicted,” and that their decision making was poor, costs were not managed properly, and they lost focus of who their customers were.
Pier 1 Imports fell by 32.2 percent throughout Monday’s trading session as investors weren’t impressed after the one-for-twenty stock split. Nor is this decline a one-time thing as the stock has been plummeting over the course of the year, shedding over 85 percent of its value since last June.
The picture looks even worse when one takes a peek at the five-year chart, which documents Pier 1’s decline from the $300s down to its current value at $7.68 per share -essentially a 98 percent decline – when taking into account the stock split price adjustment.
With a market cap of only $32.7 million at the moment, no one has much optimism for the retailer, with most agreeing that the best course of action would be to find a buyer who’d be interested in gobbling up their retail assets.
Pier 1 Imports Company Profile
Pier 1 Imports Inc is a United-States-based retailer of decorative accessories, furniture, candles, homeware, gifts and seasonal products. The company operates through retail stores and an e-commerce website under the brand Pier 1 Imports.
Most of the company’s stores are located in the U.S., followed with a few stores in Canada. The company also provides products and licenses the Pier 1 Imports brand to Grupo Sanborns, which operates a number of stores in Mexico and El Salvador. The company sells merchandise produced in a number of countries, such as China, India, Vietnam, Indonesia, the U.S., and others. – Warrior Trading News