Pier 1 Imports Fourth Quarter Earnings Preview

The recession hit the company pretty hard as the tough housing market resulted in people spending less to furnish new properties, as well as cutting back on spending for their current homes.

Last quarter the company reported a profit of 2 cents per share, and this was the first time since the fourth quarter 2008 that the company did not post a loss. To get a better idea of just how hard the economy has hit the company, the fourth quarter 2008 profit was the first profit since all the way back to the fourth quarter of 2005.

Traders seem to believe that Pier 1 will be besting Wall Street estimates, and Schaeffer's Research reports that they are seeing some heavy action in call options for Pier One going into tomorrow's report. Schaeffer's notes that its put/call ratio on the stock has dropped by 73% since March 23, with calls outnumbering puts 2 to 1 for all options with less than 3 months until options expiration.

Despite posting so many quarterly losses in a row, the stock has been enjoying a nice run over the past year as it has been able to consistently outpace analyst estimates. The company has beat out analyst estimates each of its last three quarters, and if it can come in above estimates the stock should continue its recent rally.

The stock is trading down 1.08% today to $7.35, down $0.08.

Here is a two year chart so you can see just how strongly the stock has been trading over the past 12 months: