Fort Worth, Texas Pier 1 Imports Inc. swung to a first-quarter profit on Thursday, helped by a hefty gain related to the reduction of some debt.
The company earned $29.3 million for the quarter, compared to a loss of $32.8 million in the prior-year period.
Pier 1 said a foreign subsidiary bought some outstanding convertible senior notes during the quarter for $27 million. The purchase lowered its outstanding debt by $79 million and led to a $48 million gain.
For the period ended May 30, sales dropped 9% to $281.1 million from $310 million due to fewer stores being open and the recession. Same-store sales slipped 7.5% in the first quarter.
Pier 1 had 1,073 North American stores at quarter's end. It plans to end the leases on 22 stores and close 5 more stores that it has not reached deals on to either lower their rents or end their leases. The company said it currently anticipates closing about 50 locations and will continue to try to get lower rents for its stores.