Pier 1 Imports reported worse-than-expected quarterly profits, beating its shares down 20 percent and casting further doubt on its chances of buying rival home-furnishings retailer Cost Plus.

Pier 1, which signaled this week it will go hostile in its bid for Cost Plus, has since pitched its offer to investors, according to sources familiar with the matter. Pier 1 has noted potential cost savings, beefed-up management, and added liquidity for Cost Plus and its shareholders.

At least one major shareholder this week has thrown its support behind the deal following initial skepticism, sources said. But others say Pier 1’s bid – equal to three-fifths of a Pier 1 share for every share of Cost Plus – is a low-ball offer.

The offer got even lower yesterday as Pier 1 shares plunged $1.23 to $5.01. That left its bid for Cost Plus valued at $3 a share, or about $66 million, versus its initial offer of $4 a share, or $88.4 million.

Observers have speculated that Pier 1 might bolster its offer with a cash portion.

A Pier 1 spokeswoman declined to comment on whether Pier 1 might sweeten its bid.