Pier 1 Imports, Inc. (PIR): Up 18% and Just Getting Started

The first change Pier 1 can make is in the area of selling, general and administrative expenses. To be blunt, the company needs to get more efficient. In the last quarter, Pier 1 spent 31.8% on SG&A. By comparison, only Williams-Sonoma came close at 30.46%. If Pier 1 wants to model better expense management in this area, they might want to look at Bed Bath & Beyond’s SG&A of 27.18% or Amazon’s percentage of 25.44%. Improving their SG&A spending would push more money to the bottom-line as earnings and cash flow.

A second way that Pier 1 can improve in the future is by implementing a more connected store and e-commerce business model. The company is already on track with a new point-of-sale system, and by allowing customers to seamlessly shop online or in-store, Pier 1 should be able to deliver on their expected growth rate.

With Pier 1 reporting strong sales and earnings growth, the company is already in position to be a great investment. If management can cut expenses, and improve on their online and in-person sales model, this could be one of the best ways to play the housing turnaround.

Chad Henage has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Bed Bath & Beyond, and Williams-Sonoma. The Motley Fool owns shares of Amazon.com.

The article Up 18% and Just Getting Started originally appeared on Fool.com and is written by Chad Henage.

Chad is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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