The company's net sales also declined, by 6.1%, from $432 million to $405.7 million. Additionally, last year's Q1 net income was $11.7 million compared to a $12 million loss this year.

"We know that it will take time to win back customers and regain market share," said Marvin Girouard, the company's chairman and CEO. One of the reasons for suffering sales is the decision by consumers to spend money on things other than home furnishings, such as travel, eating out, clothing and entertainment, he said.

Executives have also acknowledged that Pier 1 has faced increasing competition from general merchandise retailers such as Target. "What we got to do is show [the customer] differentiation," from those competitors, Girouard stressed. While consumers may flock to Target to buy items at lower prices, Pier 1 sells higher-quality wares, he insisted.