Pier Isn't No. 1

• Email
• Share
• Print

Higher gas and food prices did not have a significant impact on the sales of major retailers in May, although Pier 1 Imports (NYSE: PIR) continues to lower guidance, thanks to disappointing results. The company said that same-store sales plunged 7.6% in May as a result of poor holiday (Mothers' Day and Memorial Day) promotions. Pier 1 had expected a decline of 4% to 6% for stores open at least a year and has forecasted a 7% to 9% drop for June.

The news doesn't get better for the store that stocks more wicker furniture than most people would know what to do with; Pier 1 also cut its first-quarter outlook from its previous guidance of $0.14 to $0.17 per share to $0.12 to $0.14. Pier 1 shares are down 4% on the negative news and have dropped nearly 30% since November.

It appears that Pier 1 is being roughed up by a list of competitors, including Williams-Sonoma (NYSE: WSM), Bed Bath & Beyond (Nasdaq: BBBY), and Cost Plus (Nasdaq: CPWM). Williams-Sonoma (see its Home Run) and Bed Bath & Beyond (see Beyond Belief) have both come off stronger-than-expected results and have really taken control of the home products/furnishings sector.

Despite improving economic conditions, including better job growth, Pier 1 continues to slide as if it forgot to put down a bath mat. With the company lowering its expectations just about every time it looks in the mirror, investors can't be expected to jump aboard a steamless train.

Looking to move into some new digs? Visit the Fool's Home Center for information and deals on mortgages, refinancing, and other home-related topics.

Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.