In the sea of doubt about retailers, it turns out Pier 1 Imports
The home furnishings retailer had been struggling for some time, and the market punished its shares, leaving investors frustrated as the stock sank from its highest prices ever back in 2003. Last year, President and CEO Alex Smith decided to focus solely on the stores. That meant doing away with the company's e-commerce site, its catalog, and its children's operations.
The turnaround looks to be on track. For a quarter anyway, but that's what I surmised might happen last December when I thought it was worth taking a long walk on what the market was considering a short Pier 1. It's also why my Foolish colleague Rich Smith suggested on Thursday that it's still worth keeping a weather eye on the retailer.
The positive report from the 2007 fourth quarter was like a beacon. This was the first quarter in three years in which the company didn't have declining same-store sales. That record was similar to that of Sears Holdings
Retailers in general and those that focus on home furnishings in particular have been suffering. The Bombay Company filed for bankruptcy, Restoration Hardware
Why should we feel that Pier 1 will weather the storm any better? Certainly the analysts are still bearish on the bamboo-and-wicker retailer, but I've felt that Pier 1 has recaptured a lot of the style that originally made it a retail and investing success. That style has been co-opted by any number of other retailers that also were able to undercut it on price.
By focusing once again on its store model and ignoring the rest, Pier 1 has been able to cut expenses partly by closing stores. That's not to say it won't run up against a rogue wave every now and then, particularly because of the fragile state of the economy, but at a price-to-sales ratio that's below most of the competition, I still find it has a brighter future.
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Bed Bath & Beyond is a Motley Fool Stock Advisor selection. Sears and Bed Bath & Beyond are Inside Value picks. The Fool owns shares of Bed Bath & Beyond. You can furnish your portfolio with 30 days of free stock picks from any of the Fool's investment services.
Fool contributor Rich Duprey owns shares of Bed Bath & Beyond but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.