Pier 1 Imports Inc. (NYSE: PIR) took a hit on Wednesday when it released its earnings after the market closed. The overall reception was not positive and is, in fact, indicative of a transitional period within the company as it attempts to “rapidly evolve” into its new business model.

The company reported its earnings at $0.10 per share and $419 million in revenues. Wall Street analysts had estimates of $0.14 in earnings per share and $426 million in revenues.

Pier 1 revised its earnings guidance for the 2015 fiscal year to $0.95 to $1.05 per share from the previous $1.14 to $1.22 per share. Thomson Reuters has estimates for the 2015 fiscal year as $1.13 in earnings per share.

Alex W. Smith, president and CEO of Pier 1, had this to say about the disappointing quarter:

While total brand traffic, conversion and average ticket all increased in the second quarter, we were challenged by soft store traffic and, more significantly, by declines in our merchandise margins. Consequently, results for the second quarter came in below our expectations. Returning our base merchandise margins toward their previous levels is a top priority, and we’re confident that it can be done through a careful balance of full and promotional pricing, as well as improvements to the initial margin.

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In after-hours trading following the earnings announcement, Pier 1 fell to $13.97 a share, about a 10% drop from the close. However, it would fall even lower in the premarket to $13.51, tacking on another 3% to the losses.

In the noon hour Thursday, Pier 1 continues to fall to $12.90, marking a total 17% drop from Wednesday’s close.

Pier 1 has a consensus price target of $19.21 and a 52-week trading range of $12.71 to $23.98. The market cap for this company is just over $1 billion.

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