Exhibit 99.1

Pier 1 Imports, Inc. Reports Fiscal 2011 Fourth Quarter and Year-End Financial Results

FORT WORTH, Texas--(BUSINESS WIRE)--April 7, 2011--Pier 1 Imports, Inc. (NYSE:PIR) today reports financial results for the fourth quarter and fiscal year ended February 26, 2011.

Fourth Quarter Highlights

• Comparable store sales increase of 8.9% versus last year’s increase of 6.5%
• Merchandise margins of 58.4% of sales compared to 55.8% last year
• Gross profit of 42.8% of sales compared to 38.9% last year
• Operating income improved 62.3% to $58.4 million compared to $36.0 million last year
• Earnings per share of $0.48 versus $0.30 per share last year
• Strong balance sheet, with $301.5 million of cash and inventories flat with last year

Beyond Profitability and Three-Year Growth Plan

Alex W. Smith, President and Chief Executive Officer, commented, “Our fiscal 2011 year was truly an exceptional year – we achieved annual operating income for the first time in six years. Comparable store sales increases, strong merchandise margins and effective cost controls contributed to the more than $100 million improvement in operating income over last year. Our new year is off to a good start and our spring and Easter assortments are resonating with our customers. Although the Easter holiday falls into April this year, March comp store sales increased 11.3% on top of last year’s March comp store sales increase of 19.4%.”

Mr. Smith continued, “We have embedded both creativity and rigor into our business, executed our initiatives and strategies extremely well, and have come out of our difficulties a stronger and more effective retailer. The journey we started four years ago to return Pier 1 Imports to profitability and beyond has reached its initial destination – profitability – but we are by no means done. Our journey will continue as we start to write the next chapter beyond profitability and extend the reach of the Pier 1 Imports brand through our stores and online. In a separate release issued today, we announced a three-year growth plan designed to drive sales, further improve profitability and increase shareholder value. We will invest capital of $200 million into our business and return value back to our shareholders through a $100 million initial share repurchase program. Our goal is to achieve sales of $200 per retail square foot and drive operating margin to at least 10% of sales within three years, and have an online business that contributes at least 10% of revenues within five years. We are now positioned offensively, rather than defensively, and our strong balance sheet and ongoing cash generation provide the resources to make this a reality. We look forward to discussing our results and providing insight into the years ahead in more detail later this morning on our conference call.”

Fourth Quarter Results

For the fourth quarter ended February 26, 2011, the Company reported net income of $57.1 million, or $0.48 per share, compared to last year’s fourth quarter net income of $34.5 million, or $0.30 per share. Total sales for the fourth quarter were $426.6 million, a 7.7% increase from $396.0 million in the year-ago quarter. Comparable store sales increased 8.9% during the fourth quarter compared to last year’s comparable store sales increase of 6.5% for the same period. The sales increase for the quarter was primarily the result of increases in store traffic, conversion rate and average ticket.

Merchandise margins for the quarter were $249.0 million, or 58.4% of sales, compared to $221.1 million, or 55.8% of sales, in the same period last year. The 260 basis point improvement in merchandise margins continues to be positively impacted by significantly lower markdown activity, strong input margins and well managed inventory levels. Store occupancy costs were $66.5 million for the quarter, or 15.6% of sales, compared to $67.0 million, or 16.9% of sales, last year. The decline was primarily the result of negotiated rental reductions with our landlords in addition to a lower overall store count. Gross profit for the quarter, which is calculated by deducting store occupancy costs from merchandise margin dollars, improved to $182.5 million, or 42.8% of sales, from $154.2 million, or 38.9% of sales, in the fourth quarter of last year.

Fourth quarter selling, general and administrative expenses totaled $119.0 million, or 27.9% of sales, compared to $113.0 million, or 28.5% of sales, in the year-ago quarter. For the quarter, SG&A expenses consisted primarily of $18.6 million in marketing, $85.2 million in payroll, and $13.5 million in other G&A costs. Selling, general and administrative expenses for the quarter included $1.7 million in other charges primarily consisting of lease termination costs compared to $1.1 million for lease termination costs and other for the same period last year.

The following table details the breakdown of fixed and variable costs included in selling, general, and administrative expenses for the fourth quarter as compared to the same period last year.

Operating income for the fourth quarter was $58.4 million, a 62.3% improvement from last year’s operating income of $36.0 million reported for the same period. The increases in sales and merchandise margins resulted in the overall improvement in operating income.

Fiscal Year Results

For the fiscal year ended February 26, 2011, the Company reported income before income taxes of $103.5 million compared to income before income taxes of $32.1 million last fiscal year. Net income for the fiscal year was $100.1 million, or $0.85 per share. Last year, net income was $86.8 million, or $0.86 per share, and included a $49.7 million gain on the retirement of debt, a $10.0 million litigation recovery and a $54.8 million income tax benefit primarily resulting from the Worker, Homeownership and Business Assistance Act of 2009. These amounts were offset last year by non-operating charges of $18.3 million associated with the voluntary conversion of the Company’s 9% convertible senior notes due 2036. Total sales for the year increased to $1,396.5 million from $1,290.9 million in the year-ago period. Comparable store sales for the fiscal year increased 10.9% compared to a comparable store sales increase of 1.5% last fiscal year. The sales increase for the year was primarily the result of increases in store traffic, conversion rate and average ticket.

Merchandise margins for the fiscal year improved 380 basis points to 58.6% of sales compared to 54.8% of sales last fiscal year. Store occupancy costs were $262.4 million, or 18.8% of sales, compared to $267.1 million, or 20.7% of sales, last year. Gross profit as a percentage of sales was 39.8% for the fiscal year compared to 34.1% of sales last fiscal year.

Selling, general and administrative expenses for the year were well-controlled and totaled $431.9 million, or 30.9% of sales, compared to $421.2 million, or 32.6% of sales, last year. SG&A expenses consisted primarily of $65.8 million in marketing, $303.8 million in payroll, and $60.5 million in other G&A costs. Selling, general and administrative expenses included $3.5 million primarily in lease termination and store closing costs, offset by a gain of $1.7 million primarily resulting from the Company’s sale of its distribution center near Chicago during the first quarter this year. Last year, the Company incurred $12.6 million in other charges primarily resulting from store closing costs, severance and other charges.

The following table details the breakdown of fixed and variable costs included in selling, general, and administrative expenses for fiscal year 2011 as compared to fiscal year 2010.

Operating income for the fiscal year was $103.7 million, a $107.0 million improvement from the $3.3 million loss reported last year. The increases in sales and merchandise margins and the Company’s focus on leveraging expenses resulted in the overall improvement in operating income. As of February 26, 2011, the Company had utilized all federal tax loss carry forwards.

Balance Sheet

At the end of the fiscal year, inventory was in line with management’s expectations and totaled $311.8 million compared to $313.5 million at the end of last fiscal year. Management continues to strategically manage its inventory purchases and monitor its inventory levels to keep them in line with consumer demand.

Cash and cash equivalents at the end of the fiscal year were $301.5 million, a $113.6 million increase from last year’s balance of $187.9 million at the end of the fiscal year. For the year, the Company generated $148.4 million of cash from operations, part of which was used to fund capital expenditures during the year of $31.0 million.

The Company previously announced that on February 15, 2011, all of its outstanding 6.375% Convertible Senior Notes due 2036 were surrendered in full and the Company paid the holders of the notes $17.1 million, which included principal and accrued interest. At the end of the fiscal year, long-term debt was comprised of $9.5 million of industrial revenue bonds.

Amended and Restated Secured Credit Facility

The Company amended and restated its $300 million secured asset-based revolving credit facility on April 4, 2011. The amended and restated facility has a five-year term and includes a $100 million accordion feature. The facility is secured by the Company’s merchandise inventory and credit card receivables. It effectively refinances the Company’s existing $300 million secured revolving credit facility, which would have expired in May 2012. The facility will be used for general corporate purposes, although the Company expects to continue funding its working capital requirements with cash flow from operations.

Fourth Quarter and Fiscal Year-End Results and Three-Year Growth Plan Conference Call Information

The Company will host a conference call concerning fiscal 2011 fourth quarter and year-end results and discuss details of the Company’s three-year growth plan at 10:00 a.m. Central Time today. Investors will be able to connect to the call through the Company’s website at www.pier1.com. The conference call can be accessed by linking through to the “Investor Relations” page to the “Events” page, or you can listen to the conference call by calling 1-800-498-7872, or if international, 1-706-643-0435. The conference ID number is 45804562.

A replay will be available after 12:00 p.m. (Central Time) for a 24 hour period and the replay can be accessed by calling 1-800-642-1687, or if international, 1-706-645-9291 using the conference ID number 45804562.

Financial Disclosure Advisory

Management’s expectations and assumptions regarding future results are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements included in this press release. Any forward-looking projections or statements should be considered in conjunction with the cautionary statements and risks contained in the Company’s Annual Report on Form 10-K. Refer to the Company’s most recent SEC filings for any updates concerning these and other risks and uncertainties that may affect the Company’s operations and performance. The Company assumes no obligation to update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied will not be realized.

Pier 1 Imports, Inc. is the original global importer of imported decorative home furnishings and gifts. Information about the Company is available on www.pier1.com.

(Financials Attached)

CONTACT:
Pier 1 Imports, Inc.
Cary Turner, 817-252-8400