Pier 1 shares up on strong sales trends

The Associated Press
Associated Press

Pier 1 Imports Inc.'s shares jumped Thursday after the home decor company reported strong sales in December.

THE SPARK: The company said that revenue from its stores open at least a year climbed 8.2 percent for the month, driven by strong traffic and shoppers spending more per transaction.

THE BIG PICTURE: The holiday shopping season is critical for retailers, as it can provide up to 40 percent of their annual revenue. And this sales measure is considered a key indicator of a retailer's financial performance as it strips away the impact of recently opened and closed stores.

The gain is on top of an 11.3 percent increase last December.

Pier 1 said that sales were strong throughout the month and across all its markets.

THE ANALYSIS: KeyBanc Capital Markets analyst Bradley Thomas said that the company's gains were best in class. The analyst said this was particularly encouraging given early indications of a lackluster holiday season for much of retail.

He reiterated a "Buy" rating and $22 price target on the company's shares.

SHARE ACTION: Shares jumped 47 cents, or 2.4 percent, to $20.47 in afternoon trading. Its stock is trading at the upper end of its 52-week trading range of $14.11 to $21.24.