Lehman Cuts Pier 1 Imports Outlook

Analyst Alan Rifkin cites sluggish traffic trends for the home-goods retailer

Lehman Brothers cut its estimates on Pier 1 Imports (PIR ).

Analyst Alan Rifkin says the home-goods retailer's July sales comparisons are in line with Pier 1's guidance, though it was driven by heightened promotional activity. He notes, while the average ticket was up, traffic was inconsistent, and inventories remained well-balanced.

Rifkin says management cut the 12 cents to 14 cents second-quarter earnings per share guidance to 10 cents to 12 cents on a continuing sluggish traffic trend and pressure on merchandise margins. Also, he estimates a shift in this year's Labor Day weekend sales event into September will negatively impact sales comparisons by 100 basis points to 200 basis points.

He cut the 13 cents second-quarter earnings per share estimate to 11 cents, trimmed the $1.23 fiscal 2005 (Feb.) estimate to $1.21, and cut the $1.42 fiscal 2006 estimate to $1.40. Rifkin keeps the equal-weight rating.

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