FORT WORTH, Texas (TheStreet) -- Pier 1 Imports (PIR - Get Report) swung to a fourth-quarter profit, helping to boost the company's optimism for the next fiscal year.

Pier 1 Imports said it believes it has huge organic growth potential; the company is still well below its historical highs in annual sales per square foot and merchandise margin.

For the fourth quarter, Pier 1 Imports reported net income of $35 million, or 30 cents a share, which was a $64 million improvement over its year-earlier net loss of $29 million, or 33 cents a share. Excluding special charges relating to store closing and severance charges, the company reported non-GAAP net income of $36 million, or 31 cents a share, which was in line with analysts' estimates.

Sales for the fourth quarter grew to $396 million from $389 million last year, helped by a 6.5% comparable-store sales gain during the period. The company also said merchandise margins were well ahead of last year. The Wall Street consensus estimate for fourth-quarter revenue was $396.3 million.

-- Reported by Andrea Tse in New York

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