The Pier 1 Imports store is seen in Broomfield, Colorado September 17, 2014. REUTERS/Rick Wilking

SAN FRANCISCO (Reuters) - Pier 1 Imports Inc's PIR.N stock plunged to its lowest level since 2009 on Monday after an analyst recommended investors avoid the shares until the furniture and home decorations retailer reverses falling sales.

Shares in the seller of wicker chairs and scented candles were down 9.8 percent in early afternoon trading on New York Stock exchange, bringing losses to about 31 percent since the company last Wednesday posted disappointing quarterly results and scrapped its dividend.

Pier 1 on Thursday detailed a three-year turnaround plan aimed at reducing store clutter and inventory, better-targeting different kinds of consumers and improving marketing, but it warned that the plan would lead to a net loss for 2018.

But in a client note on Monday, Raymond James analyst Budd Bugatch cut his rating on Pier 1 to “underperform” from “market perform,” and recommended that investors “exit the shares now.”

“We believe there will be ample time and opportunity to revisit the recommendation if and when it becomes clear that management’s plan is working and a favorable investment opportunity exists,” Bugatch wrote.

Pier 1 has struggled in recent years to keep up with surging competition between sellers of home goods, including Williams-Sonoma WSM.N and Target TGT.N, as well as online sellers Wayfair Inc W.N and Overstock.com Inc OSTK.O.

Home decor superstore At Home Group's HOME.N stock has more than doubled since its initial public offering in 2016. Since that time, Pier 1's stock has lost half of its value, and on Monday it traded at $2.37, its lowest price since 2009.

Stiff competition has led Pier 1 and some of its rivals to offer nearly permanent discounts, which cannibalize earnings. Typing “Pier 1” into a Google search bar on Monday, the first word that autocompleted was “coupon.”