Shares of Pier 1 Imports (PIRRQ) plunged to new 52-week lows following the company's first-quarter results on June 19 in which the company reported weak earnings. While the quarter didn't go well, investors looking for a company with under-appreciated long-term prospects that is trading near 52-week lows may need to take a closer look at Pier 1 Imports.

Early innings of e-commerce
Pier 1 Imports is in the very early stages of an e-commerce strategy that should raise brand awareness and thus yield higher sales. Presently, e-commerce accounts for 9% of its total sales, an increase of 260% from the year-ago period and almost 50% higher than the figure last quarter.

Pier 1 continues to increase the number of SKUs it offers through its online channel, which represents a business driver for the coming years. The company is also focusing on its Express Request initiative, which offers an assortment of furniture styles, fabrics, and sizes that it can deliver in 10 days or less. 

By focusing more attention on its online initiatives, Pier 1 Imports will be able to offer its customers a larger assortment of products without running inventory risks in individual stores.

Over time, Pier 1 Imports will be able to utilize e-commerce statistics to fill its stores with the most productive SKUs as many consumers tend to visit a company's website prior to visiting its stores. 

Pier 1 Imports noted during its first-quarter conference call that 25% of e-commerce transactions were generated from physical store locations and 30% of online orders were picked up in stores. With a stronger presence in the e-commerce space, Pier 1 Imports runs a higher chance of avoiding end-of-season discounts on unsold merchandise in stores. 

Pier 1 Imports is also investing in its new point-of-sales system which makes it easier for a sales associate to suggest product attachments and close sales more efficiently.

Pier 1 lowered its fiscal 2015 guidance and expects to earn $1.14-$1.22 per share from prior guidance of $1.16-$1.24. However, investors who have longer time horizons should remember that the company guided toward $400 million in e-commerce sales in fiscal 2016, which implies that the company is patient on its turnaround story which may come next year.

Recent developments a positive
Pier 1 Imports emerged from a difficult quarter, but has other initiatives aside from e-commerce that could drive growth. For starters, the company is actively relocating stores to more productive locations.

As an example, Pier 1 Imports moved a store in Staten Island, New York down the street to a new location right next to a Trader Joe's market, as the two companies share similar customer demographics.

During the recent quarter, the company closed 14 stores, some of which were relocations as the company monitors the quality of its real-estate portfolio. Over the last three years the company has remodeled or refurbished more than half of its locations. Fiscal 2015 will mark the final year in which the company invests in improving the quality of its real estate assets. Investors who have the patience and time horizons to wait for the company's investments to pay off will likely receive rewards over time.

Stacking up the competition
Williams-Sonoma (WSM 1.31%) is ahead of Pier 1 Imports in the online space, which represents around half of its business. Williams-Sonoma is the ultimate definition of a multi-channel retailer, as its e-commerce channel has delivered a high operating margin and proven to be a tremendous growth vehicle.

Williams-Sonoma, like Pier 1 Imports, is investing in its brands, infrastructure, and supply chain to fuel growth over the coming years. The company has many avenues of growth over the coming years that include emerging concepts like West Elm, Rejuvenation, Mark & Graham, and Williams-Sonoma Home.

Williams-Sonoma has proven that it is a top-notch retailer by delivering stellar results, especially in the difficult fourth quarter of 2013 and the first quarter of 2014. It is reasonable for investors to assume that the company could continue to use its strong data analytics capabilities to continue to operate with a competitive edge.

Foolish take
Pier 1 Imports has a clear and focused vision of its near-term business.

Recent challenges have forced the company to turn its three-year growth plan into a four-year plan which kicks in during fiscal 2016. The company has guided for an operating margin of 11%-11.5% by the end of fiscal 2014. Previously, the company guided for an operating margin of 12% by the end of fiscal 2015.

With advancements in e-commerce and technology not yet fully realized, management can achieve its 2016 goals, especially as the company realizes the full benefit of renovating and improving the remaining stores in its portfolio.

Naturally, Williams-Sonoma is the safer investment as the company has a proven track record as a standout in the retail space and is working on improving its business for future growth as opposed to Pier 1 Imports which is redefining its business for future growth.