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What: Shares of retailer Pier 1 Imports (NYS: PIR) climbed as much as 10% in intraday trading Thursday after the company released sales numbers for the second quarter. But gains were tempered when buyer's remorse set in later in the day, and as I'm writing shares are only up about 4%.
So what: Same-store sales climbed 10.8% in the second quarter, contributing to sales of $340 million, above estimates. Better yet, the increase in sales flowed well to the bottom line as gross margins improved to about 59.3%, and expected earnings per share of $0.14 topped estimates by a penny.
Now what: Strong same-store-sales growth is every retailer's dream, and Pier 1 has made all the right moves to make that happen. A focus on smaller items in a down economy has not only helped sales but also margins. I think the forward P/E ratio of 12 shares currently trade at is a nice value for investors willing to bet that retailers will continue to benefit when the economy improves.
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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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.
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