What: Shares of home furnishings retailer Pier 1 Imports (NYSE:PIR) surged 42% in March, according to data from S&P Global Market Intelligence. The struggling retailer got a boost following a preliminary earnings report on March 7 that showed its sales sliding less than expected.

So what: Pier 1's revenue fell 1.3% in the quarter that ended Feb. 27, but that was better than the company's guidance of a 2%-4% decline and analyst expectations of a 3.9% decrease. On the bottom line, management said it expected earnings per share to come in at $0.18-$0.22, in line with estimates of $0.20. CEO Alex Smith noted "positive customer response to our holiday and seasonal assortments" and said the company was able to reduce inventory levels by 15% from a year ago, a move that should help lower costs and boost efficiency. 

Comparable sales, which include e-commerce, were down 0.7%, better than the company's guidance of a 2%-4% drop.

Now what: Shares of Pier 1 spiked 33% on the day of the earnings report, capping a rally that began when the broad market bottomed out in February. Since Feb. 11, the stock has gained 75%.  After two disappointing quarters, the preliminary earnings seemed to restore the market's faith in the home furnishings specialist -- but with revenue still falling, I'd question the stock's ability to keep climbing. 

CEO Smith noted the company will launch a TV ad campaign in April, which could help drive sales momentum positive. We'll learn more when the company delivers its complete full-year earnings report on April 13.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.