(RTTNews) - Thursday, home improvement retailer Pier 1 Imports Inc. (PIR: News ) reported a narrower net loss in its second quarter, helped by lower operating costs, despite a decline in comparable store sales due to reductions in traffic. The Fort Worth, Texas-based company's loss per share was narrower- than-expected by the Wall Street analysts. Looking ahead, the importer of decorative home furnishings and gifts said it feels very well positioned for the third quarter, and that it sees a stronger sales trend in the third and fourth quarter.

Second-quarter net loss was $15.78 million or $0.17 per share, compared to a net loss of $30.16 million or $0.34 per share, for the same period last year.

On average, five analysts polled by Thomson Reuters expected the company to report a loss of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Total sales for the quarter declined to $286.67 million from $320.49 million in the year-ago quarter, yet beat three analysts' consensus revenue estimate of $281.92 million.

Comparable store sales during the quarter declined 7.6%, attributed to reductions in traffic reflecting the sluggish economic environment. Without the effects of Canadian currency conversion rates, the decline in comparable store sales was 6.9% during the fiscal quarter.

Operating loss was $15.30 million, narrower than prior year's operating loss of $28.43 million, mainly due to decline in operating costs and expenses to $301.98 million from $348.92 million a year ago.
Merchandise margins for the quarter were 52% of sales, compared to 49% of sales in the same period last year, positively impacted by reduced markdown activity as well as strong initial mark ups.

Commenting on the results, Alex Smith, president and chief executive officer, said, "At the end of the first quarter we indicated that, despite the pressure of the economic environment, our relentless focus on executing our business priorities, which speak to great merchandise, great stores, and a lean and efficient infrastructure, was yielding results. We are very pleased with what we were able to accomplish in the second quarter as our sales, merchandise margin and operating results continued to exceed our internal budgets."

In the preceding first quarter, Pier 1 Imports had reported a net profit of $29.31 million or $0.32 per share, compared to a net loss of $32.82 million or $0.37 per share last year, driven by substantial gain on repurchase of debt and lower cost and expenses. Net sales declined to $281.13 million from $310.02 million in the comparable period a year ago.

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