Pier 1 Imports (NYSE:PIR), a retailer of home products from accent tables to kitchenware, has beat analyst estimates on profits for the second quarter of its fiscal year due to strong sales growth.
Net income for the quarter ending August 28, 2010 was $14.4 million, or $0.12 per share, compared to a loss of $15.8 million, or $0.17 per share for the same period last year.
According to Thomson Reuters, analysts were expecting profits of $0.11 per share.
This was the fourth consecutive quarterly profit after years of losses due to tightening of consumer spending and the housing downturn.
The company achieved comparable store sales growth of 11.2% for the second quarter, versus last year's decline of 7.6%.
Total sales for the current period were $309.9 million, an 8.1% increase from the year-ago quarter.
The period is also the first time the company has reported a second quarter operating income in six years. Operating income totaled $15.2 million, compared to an operating loss of $15.3 million last year, due to tightening of expenses and an improvement in sales and margins.
"Our return to profitability and beyond is firmly on track - we are all extremely upbeat about short and long-term prospects for our company," said president and CEO Alex W. Smith.
Pier 1 has worked to improve its financial results over the last year, decreasing clearance sales, reducing costs and managing inventory levels to keep in line with consumer demand.
As a result, merchandise margins for the quarter were 58.3% of sales, compared to 52.0% of sales for the same period last year.
The US home goods retailer managed to reduce store occupancy costs by negotiating rents with landlords.
The company ended the quarter with $187.6 million of cash and $26.0 million of debt.
Pier 1 was up more than 6% in the first hour of trading on Thursday, reaching $8.5 at 10:00am ET on the New York Stock Exchange.
In September last year, the company was trading around levels of $2.7.