Pier 1 shares climb after company posts 4Q results

Apparently in response to troubled home decor chain Pier 1 Imports Inc. announcing it cut inventory levels, its shares rose during Tuesday trading despite the company's report of a fourth-quarter loss.

For the three months that ended Feb. 28, including most of the crucial holiday shopping season, the company lost $29 million, or 33 cents per share. That compares with a profit of $14 million, or 16 cents per share, for the same period a year earlier.

Sales fell 11 percent to $389 million from $437 million.

Analysts surveyed by Thomson Reuters expected the Fort Worth, Texas-based chain to lose 18 cents on revenue of $358.6 million.

Same-store sales _ an important retail industry metric of sales in stores open at least a year that eliminates the effect of stores opening or closing _ sank 9.7 percent.

Merchandise margins for the quarter were 44.3 percent, down from 48 percent in the fourth quarter, and inventory was $316 million, down from $412 million last year.

The company said it expects fiscal 2010 inventory to be in a range between $300 million and $340 million.

Standard & Poor's analyst Michael Souers said he was maintaining his hold rating on Pier 1.

"While (Pier 1) has made significant progress in reducing inventory levels, which should boost gross margins, we continue to project sales weakness throughout" the fiscal year," Souers said in a research note.

For the fiscal year, Pier 1 said it lost $129 million, or $1.45 per share. The company lost $96 million, or $1.09 per share, the year before.

Total sales sank nearly 13 percent to $1.32 billion.

Executives said they expect to remain unprofitable for two more years because the recession is cutting so deeply into its sales.

"It is obvious that the recession has delayed our return to profitability," Chief Executive and President Alex Smith told investors during a conference call. "We are disappointed by this but not thrown off balance or unnerved."

Pier 1 shares climbed 12 cents, or 19.3 percent, to 76 cents per share in late-afternoon trading Tuesday.