Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 31, 2019 | Oct. 04, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 31, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | PIR | |
Entity Registrant Name | PIER 1 IMPORTS INC/DE | |
Entity Central Index Key | 0000278130 | |
Current Fiscal Year End Date | --02-29 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 4,276,081 | |
Entity Shell Company | false | |
Entity File Number | 001-07832 | |
Entity Tax Identification Number | 75-1729843 | |
Entity Address, Address Line One | 100 Pier 1 Place | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76102 | |
City Area Code | 817 | |
Local Phone Number | 252-8000 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 304,590 | $ 355,336 | $ 618,914 | $ 727,200 |
Cost of sales | 253,752 | 261,830 | 489,256 | 513,555 |
Gross profit | 50,838 | 93,506 | 129,658 | 213,645 |
Selling, general and administrative expenses | 131,872 | 143,149 | 274,854 | 281,729 |
Depreciation | 12,021 | 12,823 | 24,424 | 25,723 |
Operating loss | (93,055) | (62,466) | (169,620) | (93,807) |
Nonoperating (income) and expenses: | ||||
Interest, investment income and other | (227) | (846) | (358) | (1,163) |
Interest expense | 5,150 | 3,594 | 10,297 | 7,144 |
Nonoperating (income) and expenses | 4,923 | 2,748 | 9,939 | 5,981 |
Loss before income taxes | (97,978) | (65,214) | (179,559) | (99,788) |
Income tax provision (benefit) | 2,573 | (14,126) | 2,705 | (20,197) |
Net loss | $ (100,551) | $ (51,088) | $ (182,264) | $ (79,591) |
Loss per share: | ||||
Basic | $ (24.29) | $ (12.68) | $ (44.28) | $ (19.80) |
Diluted | $ (24.29) | $ (12.68) | $ (44.28) | $ (19.80) |
Average shares outstanding during period: | ||||
Basic | 4,139 | 4,028 | 4,116 | 4,019 |
Diluted | 4,139 | 4,028 | 4,116 | 4,019 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (100,551) | $ (51,088) | $ (182,264) | $ (79,591) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments | 630 | (32) | 79 | (261) |
Pension adjustments | 2 | 6 | 3 | 338 |
Other comprehensive income (loss) | 632 | (26) | 82 | 77 |
Comprehensive loss, net of tax | $ (99,919) | $ (51,114) | $ (182,182) | $ (79,514) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2019 | Mar. 02, 2019 | Sep. 01, 2018 |
Current assets: | |||
Cash and cash equivalents, including temporary investments of $2,956, $49,532 and $89,208, respectively | $ 10,007 | $ 54,878 | $ 116,769 |
Accounts receivable, net | 25,609 | 21,189 | 24,183 |
Inventories | 328,642 | 347,584 | 386,691 |
Prepaid expenses and other current assets | 50,499 | 49,876 | 51,797 |
Total current assets | 414,757 | 473,527 | 579,440 |
Properties and equipment, net of accumulated depreciation of $580,086, $556,426 and $578,476, respectively | 121,129 | 149,356 | 168,089 |
Operating lease right-of-use assets | 625,171 | ||
Other noncurrent assets | 29,342 | 33,407 | 57,460 |
Assets, Total | 1,190,399 | 656,290 | 804,989 |
Current liabilities: | |||
Accounts payable | 146,442 | 121,969 | 181,486 |
Gift cards and other deferred revenue | 37,424 | 37,655 | 43,388 |
Borrowings under revolving line of credit | 55,000 | ||
Accrued income taxes payable | 302 | ||
Current portion of long-term debt | 2,438 | 2,000 | 2,000 |
Current portion of operating lease liabilities | 150,184 | ||
Other accrued liabilities | 98,475 | 107,539 | 117,755 |
Total current liabilities | 489,963 | 269,465 | 344,629 |
Long-term debt | 258,900 | 245,624 | 197,310 |
Long-term operating lease liabilities | 513,641 | ||
Other noncurrent liabilities | 17,571 | 51,672 | 55,882 |
Commitments and contingencies | |||
Shareholders' equity (deficit): | |||
Common stock, $0.001 par, 25,000,000 shares authorized, 6,262,000 issued | 6 | 6 | 6 |
Paid-in capital | 141,943 | 138,469 | 137,510 |
Retained earnings | 353,698 | 534,419 | 653,661 |
Cumulative other comprehensive loss | (7,779) | (7,861) | (7,400) |
Less -- 1,990,000, 1,981,000 and 1,984,000 common shares in treasury, at cost, respectively | (577,544) | (575,504) | (576,609) |
Total shareholders' equity (deficit) | (89,676) | 89,529 | 207,168 |
Liabilities and Equity, Total | $ 1,190,399 | $ 656,290 | $ 804,989 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 31, 2019 | Mar. 02, 2019 | Sep. 01, 2018 |
Statement Of Financial Position [Abstract] | |||
Cash and cash equivalents, temporary investments | $ 2,956 | $ 49,532 | $ 89,208 |
Properties and equipment, accumulated depreciation | $ 580,086 | $ 556,426 | $ 578,476 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Common stock, shares issued | 6,262,000 | 6,262,000 | 6,262,000 |
Treasury stock, shares | 1,990,000 | 1,981,000 | 1,984,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 31, 2019 | Sep. 01, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (182,264) | $ (79,591) |
Adjustments to reconcile to net cash provided by (used in) operating activities: | ||
Depreciation | 28,130 | 29,761 |
Non-cash lease expense | 565 | |
Stock-based compensation expense | 918 | 1,380 |
Deferred compensation, net | 280 | 1,477 |
Deferred income taxes | 2,337 | (21,419) |
Other | 6,969 | 1,665 |
Changes in cash from: | ||
Inventories | 18,916 | (39,343) |
Prepaid expenses and other assets | (3,471) | (2,291) |
Accounts payable and other liabilities | 18,802 | 115,327 |
Accrued income taxes payable, net of payments | (422) | (2,461) |
Net cash provided by (used in) operating activities | (109,240) | 4,505 |
Cash flows from investing activities: | ||
Capital expenditures | (6,339) | (25,643) |
Proceeds from disposition of properties | 509 | 1,678 |
Proceeds from sale of restricted investments | 2,226 | 2,411 |
Purchase of restricted investments | (749) | (1,121) |
Net cash used in investing activities | (4,353) | (22,675) |
Cash flows from financing activities: | ||
Stock purchase plan and other, net | 516 | 712 |
Repayments of long-term debt | (1,000) | (1,000) |
Borrowings under revolving line of credit | 118,000 | |
Repayments of borrowings under revolving line of credit | (63,000) | |
Borrowings under company owned life insurance | 14,244 | |
Net cash provided by (used in) financing activities | 68,760 | (288) |
Effect of exchange rate changes on cash | (38) | (152) |
Change in cash and cash equivalents | (44,871) | (18,610) |
Cash and cash equivalents at beginning of period | 54,878 | 135,379 |
Cash and cash equivalents at end of period | $ 10,007 | $ 116,769 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock Outstanding | Common Stock | Paid-in Capital | Retained Earnings | Cumulative Other Comprehensive Income (Loss) | Treasury Stock |
Beginning Balance at Mar. 03, 2018 | $ 277,570 | $ 6 | $ 168,543 | $ 726,232 | $ (7,477) | $ (609,734) | |
Beginning Balance, Common Stock at Mar. 03, 2018 | 4,163 | ||||||
Net loss | (79,591) | (79,591) | |||||
Cumulative effect of accounting change | 7,020 | 7,020 | |||||
Other comprehensive income (loss) | 77 | 77 | |||||
Stock-based compensation expense | 1,380 | (25,791) | 27,171 | ||||
Stock-based compensation expense (in shares) | 98 | ||||||
Stock purchase plan and other | 712 | (5,242) | 5,954 | ||||
Stock purchase plan and other (in shares) | 17 | ||||||
Ending Balance at Sep. 01, 2018 | 207,168 | 6 | 137,510 | 653,661 | (7,400) | (576,609) | |
Ending Balance, Common Stock at Sep. 01, 2018 | 4,278 | ||||||
Beginning Balance at Jun. 02, 2018 | 256,788 | 6 | 180,644 | 704,749 | (7,374) | (621,237) | |
Beginning Balance, Common Stock at Jun. 02, 2018 | 4,124 | ||||||
Net loss | (51,088) | (51,088) | |||||
Other comprehensive income (loss) | (26) | (26) | |||||
Stock-based compensation expense | 1,070 | (40,076) | 41,146 | ||||
Stock-based compensation expense (in shares) | 142 | ||||||
Stock purchase plan and other | 424 | (3,058) | 3,482 | ||||
Stock purchase plan and other (in shares) | 12 | ||||||
Ending Balance at Sep. 01, 2018 | 207,168 | 6 | 137,510 | 653,661 | (7,400) | (576,609) | |
Ending Balance, Common Stock at Sep. 01, 2018 | 4,278 | ||||||
Beginning Balance at Mar. 02, 2019 | 89,529 | 6 | 138,469 | 534,419 | (7,861) | (575,504) | |
Beginning Balance, Common Stock at Mar. 02, 2019 | 4,281 | ||||||
Net loss | (182,264) | (182,264) | |||||
Cumulative effect of accounting change | 1,543 | 1,543 | |||||
Other comprehensive income (loss) | 82 | 82 | |||||
Stock-based compensation expense | 918 | 19,069 | (18,151) | ||||
Stock-based compensation expense (in shares) | (61) | ||||||
Stock purchase plan and other | 516 | (15,595) | 16,111 | ||||
Stock purchase plan and other (in shares) | 52 | ||||||
Ending Balance at Aug. 31, 2019 | (89,676) | 6 | 141,943 | 353,698 | (7,779) | (577,544) | |
Ending Balance, Common Stock at Aug. 31, 2019 | 4,272 | ||||||
Beginning Balance at Jun. 01, 2019 | 9,223 | 6 | 151,692 | 454,249 | (8,411) | (588,313) | |
Beginning Balance, Common Stock at Jun. 01, 2019 | 4,237 | ||||||
Net loss | (100,551) | (100,551) | |||||
Other comprehensive income (loss) | 632 | 632 | |||||
Stock-based compensation expense | 790 | 1,534 | (744) | ||||
Stock-based compensation expense (in shares) | (3) | ||||||
Stock purchase plan and other | 230 | (11,283) | 11,513 | ||||
Stock purchase plan and other (in shares) | 38 | ||||||
Ending Balance at Aug. 31, 2019 | $ (89,676) | $ 6 | $ 141,943 | $ 353,698 | $ (7,779) | $ (577,544) | |
Ending Balance, Common Stock at Aug. 31, 2019 | 4,272 |
Loss Per Share
Loss Per Share | 6 Months Ended |
Aug. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | NOTE 1 – LOSS PER SHARE Basic loss per share amounts were determined by dividing net loss by the weighted average number of common shares outstanding for the period. Stock-based awards totaling 802,600 and 475,800 were excluded from the computation for the 13 and 26 weeks ended August 31, 2019, respectively, as the effect would be antidilutive. Stock-based awards totaling 133,200 and 98,600 were excluded from the computation for the 13 and 26 weeks ended September 1, 2018, respectively, as the effect would be antidilutive. Loss per share amounts were calculated as follows (in thousands except per share amounts): 13 Weeks Ended 26 Weeks Ended August 31, September 1, August 31, September 1, 2019 2018 2019 2018 Net loss $ (100,551 ) $ (51,088 ) $ (182,264 ) $ (79,591 ) Weighted average shares outstanding: Basic 4,139 4,028 4,116 4,019 Effect of dilutive stock options — — — — Effect of dilutive restricted stock — — — — Diluted 4,139 4,028 4,116 4,019 Loss per share: Basic $ (24.29 ) $ (12.68 ) $ (44.28 ) $ (19.80 ) Diluted $ (24.29 ) $ (12.68 ) $ (44.28 ) $ (19.80 ) Per share figures for all periods presented reflect the Company’s 1‑for‑20 reverse stock split effected on June 20, 2019. See Note 5 Notes to Consolidated Financial Statements |
Leases
Leases | 6 Months Ended |
Aug. 31, 2019 | |
Leases [Abstract] | |
Leases | NOTE 2 – LEASES In the first quarter of fiscal 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-02, “ Leases Topic 842 Note 9 of the Notes to Consolidated Financial Statements The Company leases certain property consisting principally of its corporate headquarters, its retail stores, the majority of its distribution and fulfillment centers, and certain equipment under operating leases. Many of the Company’s leases include options to renew at the Company’s discretion. The renewal options are not included in the measurement of right-of-use (“ROU”) assets and lease liabilities as the Company is not reasonably certain to exercise available options. Rent escalations occurring during the term of the leases are included in the calculation of the future minimum lease payments and the rent expense related to these leases is recognized on a straight-line basis over the lease term. The Company determines whether an agreement contains a lease at inception based on the Company’s right to obtain substantially all of the economic benefits from the use of the identified asset and its right to direct the use of the identified asset. Lease liabilities represent the present value of future lease payments and the ROU assets represent the Company’s right to use the underlying assets for the respective lease terms. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The ROU asset is further adjusted to account for previously recorded lease-related expenses such as deferred rent and other lease liabilities. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate to calculate the present value of future lease payments. The incremental borrowing rate represents an estimate of the interest rate that would be required to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company elected not to recognize a ROU asset and a lease liability for leases with an initial term of twelve months or less and not to separate lease and non-lease components. In addition to minimum lease payments, certain leases require payment of a proportionate share of real estate taxes and certain building operating expenses or payments based on a percentage of sales in excess of a specified base. These variable lease costs are not included in the measurement of the ROU asset or lease liability due to unpredictability of the payment amount and are recorded as a lease expense in the period incurred. The Company’s lease agreements do not contain residual value guarantees or significant restrictions or covenants other than those customary in such arrangements. As of August 31, 2019, the Company did not have material leases that had been signed but not yet commenced. The components of lease cost are as follows (in thousands): 13 Weeks Ended 26 Weeks Ended August 31, August 31, 2019 2019 Operating lease cost $ 53,693 $ 109,603 Short-term lease cost 1,280 2,082 Variable lease cost 13,771 28,376 Less: Sublease income 424 856 Total lease cost $ 68,320 $ 139,205 The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company’s leases as of August 31, 2019: Weighted-average remaining lease term - operating leases (years) 5.03 Weighted-average discount rate - operating leases 10.04 % At August 31, 2019, the Company had the following future minimum operating lease payments (in thousands): Fiscal Year 2020 (remaining) $ 108,724 2021 195,117 2022 165,957 2023 131,316 2024 94,960 Thereafter 153,191 Total lease payments 849,265 Less: Interest 185,440 Total lease obligations $ 663,825 The following table discloses supplemental cash flow information related to the Company’s leases (in thousands): 13 Weeks Ended 26 Weeks Ended August 31, August 31, 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 56,634 $ 114,129 |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 6 Months Ended |
Aug. 31, 2019 | |
Tangible Asset Impairment Charges [Abstract] | |
Impairment of Long-Lived Assets | NOTE 3 – IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets are reviewed for impairment at least quarterly or whenever an event or change in circumstances indicates that their carrying values may not be recoverable. If the impairment analysis indicates that the carrying value of the assets exceeds the sum of the expected undiscounted cash flows, the assets may be considered impaired. For store level long-lived assets, expected cash flows are determined based on management’s estimate of future sales, merchandise margin rates and expenses over the remaining expected terms of the leases. Long-lived store assets are valued at fair value using inputs classified as Level 3 in the fair value hierarchy, which are unobservable inputs based on the Company’s assumptions. Impairment, if any, is recorded in the period in which the impairment occurred. The Company recorded impairment charges for the second quarter and first half of fiscal 2020 of $3,026,000 and $3,206,000, respectively, related to fixed assets. The Company also recorded impairment charges for the second quarter and first half of fiscal 2020 of $1,267,000 and $1,439,000, respectively, related to lease ROU assets. Impairment charges were included in selling, general and administrative (“SG&A”) expenses. The Company recorded no impairment charges in the second quarter and first half of fiscal 2019. The projection of future cash flows requires the use of judgment and estimates. If actual results differ from the Company’s estimates, additional charges for asset impairments may be recorded in the future. |
Long-Term Debt and Available Cr
Long-Term Debt and Available Credit | 6 Months Ended |
Aug. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Available Credit | NOTE 4 – LONG-TERM DEBT AND AVAILABLE CREDIT Revolving Credit Facility — The Company has a $350,000,000 secured revolving credit facility, with a $150,000,000 accordion feature (subject to the terms and conditions set forth therein), that matures on June 2, 2022 (“Revolving Credit Facility”). Credit extensions under the Revolving Credit Facility are limited to the lesser of $350,000,000 or the amount of the calculated borrowing base, as defined in the Revolving Credit Facility, which was $251,936,000 as of August 31, 2019. The Company had $55,000,000 in cash borrowings and $46,431,000 in letters of credit outstanding under the Revolving Credit Facility, with $150,505,000 remaining available for cash borrowings, all as of August 31, 2019. At the Company’s option, borrowings will bear interest, payable quarterly or, if earlier, at the end of each interest period, at either the adjusted LIBOR rate as defined in the Revolving Credit Facility plus a spread varying from 125 to 150 basis points per annum, depending on the amount then borrowed under the Revolving Credit Facility, or the prime rate as defined in the Revolving Credit Facility plus a spread varying from 25 to 50 basis points per annum, depending on the amount then borrowed under the Revolving Credit Facility. The Revolving Credit Facility includes a $50,000,000 first-in, last-out tranche (“FILO Tranche”). The FILO Tranche expands the Revolving Credit Facility to $400,000,000 and modifies the borrowing base. The FILO Tranche includes a $15,000,000 first-in, last-out loan (“FILO Loan”), subject to a borrowing base, which bears interest at either the adjusted LIBOR rate plus 300 basis points per annum or the prime rate plus a spread varying from 25 to 50 basis points per annum, depending on the amount then borrowed under the Revolving Credit Facility. The FILO Tranche also includes a $35,000,000 term loan (“ABL Term Loan”), subject to a borrowing base, which bears interest at the adjusted LIBOR rate plus 800 basis points per annum, and which will amortize in equal quarterly installments of 1.25% of the original principal amount thereof commencing on June 30, 2020. The FILO Tranche is a term loan and does not revolve. The maturity date of each of the FILO Loan and the ABL Term Loan is June 2, 2022. As of August 31, 2019, the Company had $50,000,000 in cash borrowings under the FILO Loan and ABL Term Loan with a carrying value of $48,983,000, net of debt issuance costs. Term Loan Facility — The Company has a senior secured term loan facility that matures on April 30, 2021 (“Term Loan Facility”). As of August 31, 2019, March 2, 2019 and September 1, 2018, the Company had $190,000,000, $191,000,000 and $192,000,000, respectively, outstanding under the Term Loan Facility with carrying values of $188,685,000, $189,290,000 and $189,894,000, respectively, net of unamortized discounts and debt issuance costs. The fair value of the amount outstanding under the Term Loan Facility was approximately $51,272,000 as of August 31, 2019, which was measured at fair value using the quoted market price. The fair value measurement is classified as Level 2 in the fair value hierarchy based on the frequency and volume of trading for which the price was readily available. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Company Owned Life Insurance Loans — During the second quarter of fiscal 2020, the Company entered into loans secured by Company owned life insurance (“COLI”) policies on former key executives. As of August 31, 2019, the Company had $14,244,000 in cash borrowings outstanding under the COLI loans. The cash surrender value of the related policies was $14,455,000 and is included in other noncurrent assets. Borrowings bear interest, payable annually, at the higher of the published monthly average as defined in the COLI policies or 5.0%. When a policy becomes payable in accordance with provisions of the policy, the related loan will mature and any outstanding loan amount will be deducted from the proceeds. |
Matters Concerning Shareholders
Matters Concerning Shareholders' Equity (Deficit) | 6 Months Ended |
Aug. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Matters Concerning Shareholders' Equity (Deficit) | NOTE 5 – MATTERS CONCERNING SHAREHOLDERS’ EQUITY (DEFICIT) On June 19, 2019, the Company’s Board of Directors authorized a 1-for-20 reverse stock split of the Company’s common stock (“Reverse Stock Split”) and the Company filed a Certificate of Amendment (“Amendment”) to its Restated Articles of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split with respect to the Company’s issued and outstanding shares of common stock, as well as its shares held in treasury. Pursuant to the Amendment, effective as of 12:01 a.m., Eastern Time, on June 20, 2019, each twenty shares of common stock issued and outstanding or held in treasury was, automatically and without any action on the Note 1 of the Notes to Consolidated Financial Statements |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Aug. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | NOTE 6 – REVENUE RECOGNITION Revenue is recognized upon customer receipt or delivery for retail sales. The Company’s revenues are reported net of discounts, returns and sales tax, and include wholesale sales and royalties. Amounts charged to customers for shipping and handling are included in net sales. A reserve has been established for estimated merchandise returns based upon historical experience and other known factors. The gross reserve for estimated merchandise returns at August 31, 2019 and September 1, 2018, was $4,480,000 and $5,773,000, respectively. For the 13 and 26 weeks ended August 31, 2019, the Company recognized revenue of $2,753,000 and $7,259,000, respectively, for gift card redemptions. For the 13 and 26 weeks ended September 1, 2018, the Company recognized revenue of $3,276,000 and $8,610,000, respectively, for gift card redemptions. Prior to recognition as revenue, these amounts were previously included in gift cards and other deferred revenue on the Company’s consolidated balance sheets as of March 2, 2019 and March 3, 2018, respectively. Disaggregated Revenues — Net sales consisted almost entirely of sales to retail customers, net of discounts, returns and sales tax, but also included delivery revenues, wholesale sales and royalties, and gift card breakage. Net sales were as follows (in thousands): 13 Weeks Ended 26 Weeks Ended August 31, September 1, August 31, September 1, 2019 2018 2019 2018 Retail sales $ 302,028 $ 352,800 $ 613,952 $ 721,793 Other (1) 2,562 2,536 4,962 5,407 Net sales $ 304,590 $ 355,336 $ 618,914 $ 727,200 (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 in Mexico and El Salvador and online in Mexico. Other sales consisted primarily of these wholesale sales and royalties received from Grupo Sanborns, as well as gift card breakage. |
Income Tax
Income Tax | 6 Months Ended |
Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 7 – INCOME TAX The income tax provision for the second quarter of fiscal 2020 was $2,573,000, compared to an income tax benefit of $14,126,000 during the same period in the prior fiscal year. The effective tax rate for the second quarter of fiscal 2020 was (2.6%), compared to 21.7% for the same period during fiscal 2019. The income tax provision for the first half of fiscal 2020 was $2,705,000, compared to an income tax benefit of $20,197,000 during the same period in the prior fiscal year. The effective tax rate for the first half of fiscal 2020 was (1.5%), compared to 20.2% in the same period during fiscal 2019. The change in income tax provision (benefit) primarily relates to the timing of the establishment of the Company’s valuation allowance. The Company recognized a federal benefit related to the net loss in the first half of fiscal 2019 prior to the establishment of the valuation allowance in the third quarter of fiscal 2019 against its U.S. federal deferred tax assets and a portion of its state deferred tax assets. During the second quarter of fiscal 2020, the Company recorded an additional valuation allowance of $2,609,000 related to certain state jurisdictions based upon the determination that it was not more likely than not that such assets would be realized. As of August 31, 2019, the Company had total unrecognized tax benefits of $4,100,000, the majority of which, if recognized, would affect the Company’s effective tax rate. It is reasonably possible a significant portion of the Company’s gross unrecognized tax benefits could decrease within the next twelve months primarily due to settlements with certain taxing jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 – COMMITMENTS AND CONTINGENCIES Putative class action complaints were filed in the United States District Court for the Northern District of Texas – Dallas Division against Pier 1 Imports, Inc., Alexander W. Smith and Charles H. Turner in August and October 2015 alleging violations under the Securities Exchange Act of 1934, as amended. The lawsuits, which were consolidated into a single action captioned Town of Davie Police Pension Plan, Plaintiff, v. Pier 1 Imports, Inc., Alexander W. Smith and Charles H. Turner, Defendants, were filed on behalf of a purported putative class of investors who purchased or otherwise acquired stock of Pier 1 Imports, Inc. between April 10, 2014 and December 17, 2015. The plaintiffs sought to recover damages purportedly caused by the Defendants' alleged violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On June 25, 2018, the District Court granted the Company’s motion to dismiss the complaint, with prejudice. The plaintiffs subsequently appealed and on August 19, 2019 the United States Court of Appeals for the Fifth Circuit affirmed the District Court’s dismissal of the amended complaint. The Company announced in January 2016 a voluntary recall of its Swingasan Chair and Stand in cooperation with the Consumer Product Safety Commission (“CPSC”). In September 2016, the Company received a staff investigatory letter from the CPSC indicating that the CPSC would investigate whether the Company complied with certain reporting requirements of the Consumer Product Safety Act with respect to the recall. The Company responded to the inquiry and cooperated with the CPSC. On September 20, 2017, the Company received a letter from the CPSC proposing to resolve certain alleged violations of the Consumer Product Safety Act relating to the Swingasan recall on terms which would require, among other things, the payment of a civil money penalty. On October 27, 2017, the Company submitted its response to the CPSC letter. The Company disagrees with a number of the allegations and legal conclusions asserted by the CPSC and believes the requested civil money penalty is excessive in view of the circumstances. The CPSC has responded to the Company’s letter and generally declined to accept the Company’s position. The Company entered into settlement discussions with the CPSC during the third quarter of fiscal 2019 that are ongoing. Given the nature of this matter and the uncertainty as to how and when it will be resolved, the Company believes that a reasonable estimate of the potential range of loss in connection with this matter is $2,000,000 to $6,200,000. While the Company anticipates that the final settlement will fall within the estimated range of outcomes, the final terms of the resolution of this matter cannot be predicted with certainty and no assurances can be given as to the specific amount that the Company may be required to pay. There are various other claims, lawsuits, inquiries, investigations and pending actions against the Company incident to the operation of its business. The Company considers these other matters to be ordinary and routine in nature. The Company maintains insurance against most of these matters. It is the opinion of management, after consultation with counsel, that the ultimate resolution of such matters will not have a material adverse effect, either individually or in the aggregate, on the Company’s financial condition, results of operations or liquidity. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Aug. 31, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Standards | NOTE 9 – NEW ACCOUNTING STANDARDS Accounting Standards — ASU 2016-02 — Leases (Topic 842) The Company adopted ASU 2016-02, “ Leases Topic 842 The Company recognized a cumulative-effect adjustment to increase the opening balance of retained earnings by $1,543,000 as of March 3, 2019, as a result of previous sale leaseback transactions and previous store impairments. The adoption of ASU 2016-02 did not have a material impact on the Company’s consolidated statements of operations or consolidated statements of cash flows for the periods ended August 31, 2019. See Note 2 of the Notes to Consolidated Financial Statements ASU 2018-02 — Income Statement Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, “ Income Statement Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Accounting Standards — ASU 2016-13 — Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2018-15 — I ntangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 6 Months Ended |
Aug. 31, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Standards | Accounting Standards — ASU 2016-02 — Leases (Topic 842) The Company adopted ASU 2016-02, “ Leases Topic 842 The Company recognized a cumulative-effect adjustment to increase the opening balance of retained earnings by $1,543,000 as of March 3, 2019, as a result of previous sale leaseback transactions and previous store impairments. The adoption of ASU 2016-02 did not have a material impact on the Company’s consolidated statements of operations or consolidated statements of cash flows for the periods ended August 31, 2019. See Note 2 of the Notes to Consolidated Financial Statements ASU 2018-02 — Income Statement Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, “ Income Statement Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Accounting Standards — ASU 2016-13 — Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2018-15 — I ntangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of Loss Per Share | Loss per share amounts were calculated as follows (in thousands except per share amounts): 13 Weeks Ended 26 Weeks Ended August 31, September 1, August 31, September 1, 2019 2018 2019 2018 Net loss $ (100,551 ) $ (51,088 ) $ (182,264 ) $ (79,591 ) Weighted average shares outstanding: Basic 4,139 4,028 4,116 4,019 Effect of dilutive stock options — — — — Effect of dilutive restricted stock — — — — Diluted 4,139 4,028 4,116 4,019 Loss per share: Basic $ (24.29 ) $ (12.68 ) $ (44.28 ) $ (19.80 ) Diluted $ (24.29 ) $ (12.68 ) $ (44.28 ) $ (19.80 ) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Cost | The components of lease cost are as follows (in thousands): 13 Weeks Ended 26 Weeks Ended August 31, August 31, 2019 2019 Operating lease cost $ 53,693 $ 109,603 Short-term lease cost 1,280 2,082 Variable lease cost 13,771 28,376 Less: Sublease income 424 856 Total lease cost $ 68,320 $ 139,205 |
Summary of Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate | The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company’s leases as of August 31, 2019: Weighted-average remaining lease term - operating leases (years) 5.03 Weighted-average discount rate - operating leases 10.04 % |
Summary of Future Minimum Operating Lease Payments | At August 31, 2019, the Company had the following future minimum operating lease payments (in thousands): Fiscal Year 2020 (remaining) $ 108,724 2021 195,117 2022 165,957 2023 131,316 2024 94,960 Thereafter 153,191 Total lease payments 849,265 Less: Interest 185,440 Total lease obligations $ 663,825 |
Supplemental Cash Flow Information Related to Company's Leases | The following table discloses supplemental cash flow information related to the Company’s leases (in thousands): 13 Weeks Ended 26 Weeks Ended August 31, August 31, 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 56,634 $ 114,129 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Net Sales | Net sales were as follows (in thousands): 13 Weeks Ended 26 Weeks Ended August 31, September 1, August 31, September 1, 2019 2018 2019 2018 Retail sales $ 302,028 $ 352,800 $ 613,952 $ 721,793 Other (1) 2,562 2,536 4,962 5,407 Net sales $ 304,590 $ 355,336 $ 618,914 $ 727,200 (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 in Mexico and El Salvador and online in Mexico. Other sales consisted primarily of these wholesale sales and royalties received from Grupo Sanborns, as well as gift card breakage. |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Detail) | Jun. 20, 2019 | Aug. 31, 2019shares | Sep. 01, 2018shares | Aug. 31, 2019shares | Sep. 01, 2018shares |
Earnings Per Share [Abstract] | |||||
Outstanding stock options excluded from computation of diluted earnings per share | 802,600 | 133,200 | 475,800 | 98,600 | |
Reverse stock split ratio | 0.05 |
Calculation of Loss Per Share (
Calculation of Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | |
Earnings Per Share Disclosure [Line Items] | ||||
Net loss | $ (100,551) | $ (51,088) | $ (182,264) | $ (79,591) |
Weighted average shares outstanding - Basic | 4,139 | 4,028 | 4,116 | 4,019 |
Weighted average shares outstanding - Diluted | 4,139 | 4,028 | 4,116 | 4,019 |
Loss per share - Basic | $ (24.29) | $ (12.68) | $ (44.28) | $ (19.80) |
Loss per share - Diluted | $ (24.29) | $ (12.68) | $ (44.28) | $ (19.80) |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Aug. 31, 2019 | Aug. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 53,693 | $ 109,603 |
Short-term lease cost | 1,280 | 2,082 |
Variable lease cost | 13,771 | 28,376 |
Less: Sublease income | 424 | 856 |
Total lease cost | $ 68,320 | $ 139,205 |
Leases - Summary of Weighted-Av
Leases - Summary of Weighted-Average Remaining Lease Term and Weighted-Average Discount Rate (Detail) | Aug. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term - operating leases (years) | 5 years 10 days |
Weighted-average discount rate - operating leases | 10.04% |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Operating Lease Payments (Detail) $ in Thousands | Aug. 31, 2019USD ($) |
Leases [Abstract] | |
2020 (remaining) | $ 108,724 |
2021 | 195,117 |
2022 | 165,957 |
2023 | 131,316 |
2024 | 94,960 |
Thereafter | 153,191 |
Total lease payments | 849,265 |
Less: Interest | 185,440 |
Total lease obligations | $ 663,825 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Company's Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Aug. 31, 2019 | Aug. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 56,634 | $ 114,129 |
Impairment of Long-Lived Asse_2
Impairment of Long-Lived Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | |
Tangible Asset Impairment Charges [Abstract] | ||||
Impairment charges related to fixed assets | $ 3,026,000 | $ 0 | $ 3,206,000 | $ 0 |
Impairment charges related to lease ROU assets | $ 1,267,000 | $ 1,439,000 |
Long-Term Debt and Available _2
Long-Term Debt and Available Credit - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Aug. 31, 2019 | Mar. 02, 2019 | Sep. 01, 2018 | |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Borrowings under loan facility | $ 190,000 | $ 191,000 | $ 192,000 |
Carrying value of long term debt | 188,685 | $ 189,290 | $ 189,894 |
Term Loan Facility | Fair Value, Inputs, Level 2 | |||
Debt Instrument [Line Items] | |||
Fair value of term loan facility | 51,272 | ||
Company Owned Life Insurance Loans | |||
Debt Instrument [Line Items] | |||
Borrowings under loan facility | 14,244 | ||
Cash surrender value of life insurance policy | $ 14,455 | ||
Borrowing interest terms | Borrowings bear interest, payable annually, at the higher of the published monthly average as defined in the COLI policies or 5.0%. | ||
FILO Loan | |||
Debt Instrument [Line Items] | |||
Borrowings outstanding | $ 50,000 | ||
ABL Term Loan | |||
Debt Instrument [Line Items] | |||
Loan, face amount, subject to borrowing base | 48,983 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | 350,000 | ||
Credit facility accordion feature | $ 150,000 | ||
Extended maturity date of revolving credit facility | Jun. 2, 2022 | ||
Credit facility borrowing base | $ 251,936 | ||
Borrowings outstanding | 55,000 | ||
Remaining borrowing | $ 150,505 | ||
Revolving Credit Facility | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis points | 1.25% | ||
Revolving Credit Facility | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis points | 1.50% | ||
Revolving Credit Facility | Prime Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis points | 0.25% | ||
Revolving Credit Facility | Prime Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis points | 0.50% | ||
Letters of Credit And Bankers' Acceptances | |||
Debt Instrument [Line Items] | |||
Borrowings outstanding | $ 46,431 | ||
Amended Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | 400,000 | ||
Amended Secured Credit Facility | FILO Tranche | |||
Debt Instrument [Line Items] | |||
Credit facility, additional borrowing capacity | 50,000 | ||
Amended Secured Credit Facility | FILO Loan | |||
Debt Instrument [Line Items] | |||
Loan, face amount, subject to borrowing base | $ 15,000 | ||
Maturity date of loan | Jun. 2, 2022 | ||
Amended Secured Credit Facility | ABL Term Loan | |||
Debt Instrument [Line Items] | |||
Loan, face amount, subject to borrowing base | $ 35,000 | ||
Percentage of quarterly installments of original principal payments | 1.25% | ||
Maturity date of loan | Jun. 2, 2022 | ||
Amended Secured Credit Facility | LIBOR | FILO Loan | |||
Debt Instrument [Line Items] | |||
Basis points | 3.00% | ||
Amended Secured Credit Facility | LIBOR | ABL Term Loan | |||
Debt Instrument [Line Items] | |||
Basis points | 8.00% | ||
Amended Secured Credit Facility | Prime Rate | Minimum | FILO Loan | |||
Debt Instrument [Line Items] | |||
Basis points | 0.25% | ||
Amended Secured Credit Facility | Prime Rate | Maximum | FILO Loan | |||
Debt Instrument [Line Items] | |||
Basis points | 0.50% |
Matters Concerning Shareholde_2
Matters Concerning Shareholders' Equity (Deficit) - Additional Information (Detail) | Jun. 20, 2019shares | Aug. 31, 2019shares | Jun. 19, 2019shares | Mar. 02, 2019shares | Sep. 01, 2018shares |
Equity [Abstract] | |||||
Reverse stock split ratio, description | 1-for-20 | ||||
Reverse stock split ratio | 0.05 | ||||
Common stock, shares authorized | 25,000,000 | 25,000,000 | 500,000,000 | 25,000,000 | 25,000,000 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Gross reserve for estimated merchandise returns | $ 4,480 | $ 5,773 | $ 4,480 | $ 5,773 |
Gift Card Redemptions | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue recognized | $ 2,753 | $ 3,276 | $ 7,259 | $ 8,610 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | ||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | $ 304,590 | $ 355,336 | $ 618,914 | $ 727,200 | |
ASU 2014-09 | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 304,590 | 355,336 | 618,914 | 727,200 | |
ASU 2014-09 | Retail Sales | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 302,028 | 352,800 | 613,952 | 721,793 | |
ASU 2014-09 | Other | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | [1] | $ 2,562 | $ 2,536 | $ 4,962 | $ 5,407 |
[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 in Mexico and El Salvador and online in Mexico. Other sales consisted primarily of these wholesale sales and royalties received from Grupo Sanborns, as well as gift card breakage. |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Sep. 01, 2018 | Aug. 31, 2019 | Sep. 01, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision (benefit) | $ 2,573 | $ (14,126) | $ 2,705 | $ (20,197) |
Effective tax rate | (2.60%) | 21.70% | (1.50%) | 20.20% |
Valuation allowance | $ 2,609 | |||
Unrecognized tax benefits | $ 4,100 | $ 4,100 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - Swingasan Chair and Stand - Voluntary Product Recall | Aug. 31, 2019USD ($) |
Minimum | |
Commitments and Contingencies Disclosure [Line Items] | |
Estimate of potential loss | $ 2,000,000 |
Maximum | |
Commitments and Contingencies Disclosure [Line Items] | |
Estimate of potential loss | $ 6,200,000 |
New Accounting Standards - Addi
New Accounting Standards - Additional Information (Detail) - USD ($) | Mar. 03, 2019 | Aug. 31, 2019 | Sep. 01, 2018 |
Change In Accounting Estimate [Line Items] | |||
Cumulative effect adjustment of retained earnings | $ 1,543,000 | $ 7,020,000 | |
ASU 2016-02 | |||
Change In Accounting Estimate [Line Items] | |||
Cumulative effect adjustment of retained earnings | $ 1,543,000 |