Home goods chain Pier 1 Imports (NYSE:PIR) saw shares tumble into the double-digits as the late reporter delivered less-than-rosy sales figures for the recently ended quarter, along with same-store sales growth that, while appealing in isolation, did not hold up to prior quarters' or Wall Street's estimates. Since 2007, the company has done a phenomenal job of coming back from the brink of extinction -- shutting down underperforming stores, improving product mix, and delivering a stronger push into the Web sales arena. On the back of an ongoing rebound and the potential to return to prior growth estimates, is Pier 1 an attractive pick today?

Earnings recap
Second-quarter earnings took a 32% slide for Pier 1, with weaker margins and poor store traffic leading the downward drive. Reversing its previously optimistic full-year guidance of $1.27 per share to $1.32 per share, the company is now expecting earnings per share in the range of $1.23 to $1.29.

CEO Alex Smith specifically mentioned the company's marketing efforts as a culprit for the decreased store traffic. "Our marketing initiatives did not include appropriate messaging around clearance and promotional activity in our stores."

Just one year ago, the company posted a quarterly same-store sales growth of 6.7%. In each of the past three years, same-store sales have averaged growth well above 7%. For the just-ended quarter, Pier 1 saw an increase of only 3.5%, prompting investors and analysts to sell off the stock significantly in last week's trading.

Sales ticked up 7.6% to $395.6 million, while the bottom line slid down to an adjusted $0.19 per share.

Retailers are highly susceptible to market hysteria and short-term weakness, which creates opportunity for the long-term investor. Is Pier1 oversold?

Detour
Smith's ongoing efforts at Pier 1 cannot be discounted, as the executive has nearly flawlessly executed a multiyear turnaround effort. The stock has noticed -- after bottoming out under $0.15 per share in 2009, Pier 1's stock has risen more than 13,500%. Startling as the number is, the stock is not insanely valued today at just under 13.4 times forward earnings. Long-term projections for same-store sales are still above competitors', and most other valuation metrics suggest the company is fair-to-slightly undervalued.

The $2.1 billion company has essentially no debt and should see margins improve over the long term as management continues its focus on online sales and a more global product mix in stores.

If you believe in Smith and Pier 1's continued outperformance (and there remains plenty of reason to do so), last week's sell-off provides a comfortable entry point for an addition to your portfolio.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.