Exhibit 99.1

                    Pier 1 Imports, Inc. Reports July Sales

    FORT WORTH, Texas--(BUSINESS WIRE)--Aug. 3, 2006--Pier 1 Imports,
Inc. (NYSE:PIR) reported that sales for the four-week period ended
July 29, 2006 aggregated $113,086,000 a decrease of 12.9% from
$129,783,000 last year, and comparable store sales declined 14.9%.
Year-to-date sales for the five-month period amounted to $632,486,000,
down 8.3% from $690,016,000 last year, and comparable store sales
declined 11.1%.
    Marvin J. Girouard, Pier 1's Chairman and Chief Executive Officer,
commented, "Sales continued to be soft in July. Weak customer traffic
persisted throughout the month and higher average ticket transactions
were offset by lower customer conversions. The home furnishings sector
continues to be under pressure due to a worsening macro-economic
environment that is limiting non-essential household purchases. We
have responded by maintaining lean inventories.
    "In August, we believe that sales and customer traffic will be
primarily driven by additional promotional efforts. Given recent
trends, we now expect merchandise margins, as a percentage of sales,
to be even with last year's second quarter. Our marketing efforts for
August include new television commercials, national magazine
advertisements, and the distribution of direct mail pieces including
Pier 1's autumn catalog featuring a broad array of merchandise and
decorative accessories. As we continue to transition new merchandise
into stores, we will feature traditional Pier 1 merchandise as well as
the new modern collections that we have recently introduced. In
addition, visual presentations in stores will move toward displaying
and promoting lower-priced, value items that should increase customer
traffic and conversions."

    Any forward-looking projections or statements made in this press
release should be considered in conjunction with the cautionary
statements contained in the Company's most recently filed report on
Form 10-Q. Management's expectations and assumptions regarding planned
store openings, financing of Company obligations from operations,
results from its new marketing, merchandising and store operations
strategies, and other 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. Risks and uncertainties
that may affect Company operations and performance include, among
others, the effects of terrorist attacks or other acts of war,
conflicts or war involving the United States or its allies or trading
partners, labor strikes, weather conditions or natural disasters,
volatility of fuel and utility costs, the general strength of the
economy and levels of consumer spending, consumer confidence, the
availability of new sites for expansion along with sufficient labor to
facilitate growth, the availability and proper functioning of
technology and communications systems supporting the Company's key
business processes, the ability of the Company to import merchandise
from foreign countries without significantly restrictive tariffs,
duties or quotas and the ability of the Company to source, ship and
deliver items from foreign countries to its U.S. distribution centers
at reasonable prices and rates and in a timely fashion.
    The Company assumes no obligation to update or otherwise 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 North America's largest specialty retailer
of imported decorative home furnishings and gifts with Pier 1
Imports(R) stores in 49 states, Puerto Rico, Canada, and Mexico and
Pier 1 kids(R) stores in the United States.

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