Home decor chain Pier 1 Imports Inc. reported a quarterly profit just above Wall Street estimates, boosted by fewer promotions, tighter cost controls and strong sales.
The company, whose wares range from wicker chairs to wine glasses, has managed its inventory tightly, reducing the need for markdowns and clearance events.
"Our return to profitability and beyond is firmly on track," chief executive officer Alex Smith said in a statement. "We are all extremely upbeat about short and long-term prospects for our company."
Profit was $14.4-million, or 12 cents a share, in the second quarter ended Aug. 28, compared with a year-earlier loss of $15.8-million, or 17 cents a share.
Analysts on average were expecting a profit of 11 cents a share, according to Thomson Reuters I/B/E/S.
This was the fourth consecutive quarterly profit for the Fort Worth, Tex.-based retailer after years of losses during the housing downturn and the recession.
Many home goods retailers reworked their strategies to salvage sales as they watched Linens 'N Things, once the No. 2 U.S. home goods chain, and smaller players like Gottschalks become casualties in the downturn.
Under Mr. Smith's leadership, Pier 1 has shed jobs, pruned its store base, negotiated with landlords to reduce rents, and made merchandising changes.
The company began offering more decorative furniture items like end- and side-tables rather than bulky pricey goods like couches and armoires. While it offered fewer items in large numbers in prior years, Pier 1 is now offering shoppers more choice.
Sales rose 8.1 per cent to $309.9-million, compared with analysts' estimates of $310.1-million. Sales at stores open at least a year rose 11.2 per cent.
The company, whose rivals include Bed Bath & Beyond Inc. , Williams-Sonoma Inc. and Cost Plus Inc. , said merchandise margins were 58.3 per cent of sales in the quarter, compared with 52 per cent a year earlier.
Pier 1 shares have dropped about 19 per cent since touching a 52-week high in April.Report Typo/Error
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