Pier 1 Imports moves to 1st-quarter profit

Pier 1 Imports Inc. moved to a fiscal first-quarter profit Thursday, helped by a hefty gain related to the reduction of some debt. The results easily topped Wall Street's expectations.

The home furnishings company earned $29.3 million, or 32 cents per share, for the quarter. It lost $32.8 million, or 37 cents per share, in the prior-year period.

Analysts predicted a loss of 36 cents per share, according to a Thomson Reuters survey. Analysts' estimates typically exclude one-time items.

Pier 1 said a foreign subsidiary bought some outstanding convertible senior notes during the quarter for $27 million. The purchase lowered its outstanding debt by $79 million and led to a $48 million gain.

For the period ended May 30, sales dropped 9 percent to $281.1 million from $310 million due to fewer stores being open and the recession.

While home furnishing stores have suffered from the soft housing market and pullback in consumer spending, Pier 1's revenue results still managed to beat Wall Street's estimate of $276.2 million.

Sales at stores open at least a year, known as same-store sales, slipped 7.5 percent in the first quarter.

Same-store sales are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Pier 1 had 1,073 North American stores at quarter's end. It plans to end the leases on 22 stores and close 5 more stores that it has not reached deals on to either lower their rents or end their leases. The retailer said it currently anticipates closing about 50 locations and will continue to try to get lower rents for its stores.