Pier 1 Imports Inc
reported a quarterly loss on Tuesday as markdowns ate into the home furnishings retailer's margins.

The loss came to $29 million, or 33 cents a share, in the fourth quarter ended on February 28, compared with a year-earlier profit of $14 million, or 16 cents a share.

Fort Worth, Texas-based Pier 1, whose rivals include Williams-Sonoma Inc and Bed Bath & Beyond , has been axing jobs, closing stores and negotiating with landlords to slash rents as part of its efforts to cut costs in a deepening recession.

Quarterly sales fell about 11 percent to $389 million. Sales at stores open at least a year fell 9.7 percent.

Merchandise margins shrank to 44.3 percent from 48.1 percent as the company offered discounts to clear inventory.

Home-goods chains have been forced to mark down prices as a U.S. housing slump and recession erode demand for furnishings and other big-ticket items.

Pier 1 shares closed at 64 cents Monday on the New York Stock Exchange, down from a nearly two-year high of $8.25 set last May.

(Reporting by Dhanya Skariachan in Bangalore; Editing by Lisa Von Ahn)