It was a good week to be a Pier 1 Imports (OTC:PIRRQ) shareholder. The housewares retailer saw its stock shoot 20% higher on the week after announcing encouraging preliminary results for the holiday quarter and presenting at an investor conference.

Pier 1's initial take for the fiscal fourth quarter that ended two weeks ago may not seem so hot at first glance. The chain sees total sales declining 1.3%, or 0.4% on a currency-adjusted basis, since the prior year's holiday showing. Comparable-store sales took a 0.7% dip, and that includes an uptick in online sales that are baked into the reported comps.

E-commerce sales have gone from 11% of Pier 1's total sales a year earlier to 14.7% now, so actual comps at the physical-store level have fallen by a couple of more percentage points than the 0.7% decline suggests. That's not a deal breaker, of course. Pier 1 has done a good job of integrating online and ship-to-store direct orders into its ecosystem. A sale is a sale. It's just something to consider in assuming that nearly flat comps suggest that store-level activity is holding steady.

The important thing -- and it's the reason why Wall Street rallied 'round the stock -- is that Pier 1 was forecasting comps to decline by 2% to 4% for the seasonally potent holiday quarter back in mid-December. Wall Street pros were also bracing for a 4% year-over-year slide in total sales.

It also helps that the stock was trading lower just before the announcement of preliminary financial results than it was three months ago when it issued its initial outlook. Sometimes it's all about the starting line. 

Investors that got in on Pier 1 stock in early 2009 -- just as it was bottoming out at $0.10 -- are sitting on a 65-bagger. However, the stock has gone on to shed more than two-thirds of its value since peaking north of $20 three summers ago. Again, it's all about the starting line. 

Pier 1 has been in a slump since earnings and profit margins peaked in fiscal 2013, and the demise has only intensified lately. The home furnishings retailers is coming off back-to-back disappointing quarters with the stock posting double-digit percentage declines both times out. 

Things appear to be different this time. Pier 1 is sticking to its bottom-line guidance, calling for earnings per share to clock in between $0.18 and $0.22. The stock will likely move again next month when it actually posts results for the quarter, this time based on its guidance for the new fiscal year. 

There should be some downside protection here, even after last week's pop. The stock's yielding a chunky 4.2%, rewarding patient investors. It trades at a reasonable 15 times earnings if it lands at the midpoint of its guidance for the fiscal fourth quarter. Now that it has overcome a couple of unfortunate quarters, it's time to stop looking at the floor and start eyeing the ceiling.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.