It's been a long three years at Pier 1 Imports (NYSE:PIR), but this morning's earnings news was worth the wait. For 11 straight quarters -- three years minus a fraction -- the erstwhile wicker wizard had presented investors with nothing but losses, more losses, and still more losses. But this morning, a new product appeared on store shelves: a profit. 

Yes, Fools, at the same time that retailers Gap, Kohl's, and American Eagle were reporting double-digit comps declines for March in the clothing department, Pier 1 shed a ray of sunshine on the retail world and crowed over its gain in same-store sales for the final quarter of fiscal 2007.

It was only two-and-a-half percentage points, to be sure. But the fourth quarter's comps were undeniably positive, as were the Q4 profits of $0.16 per share.

On the minus side, Pier 1's total sales didn't fare so well. Closing 79 underperforming stores cost the company a lot of potential revenue, with the result that total sales dropped 7.8%. But then again, bigger isn't always better -- losing those sales, and closing those stores, appears to have done wonders for Pier 1's margins. Gross margin for the quarter surged 720 basis points to 31.8%. Add in another 860 basis points in reduced operating costs, and Pier 1 swung solidly into the black.

... for the quarter
Not to detract from Pier 1's comeback, but one quarter's performance does not a buy thesis make. Pier 1 still lost money in 2007 -- $1.09 per share, to be precise -- and it left $73.7 million less on the balance sheet as it burned through cash. The company also has a long way to go before it can claim to be earning gross margins on the order of rivals such as Williams-Sonoma (NYSE:WSM) or Bed Bath & Beyond (NASDAQ:BBBY).

But now that I know Pier 1 has remembered how to earn a profit, I see at least a possibility that it will do so again. And if it does so more consistently? Why, we might just see that price-to-sales ratio edge up a bit, and the share price along with it.