As retailers gear up for the holiday selling season, industry watchers ask the same inevitable questions. How promotional will they get? Will discounts make a difference to their sales? And at what cost to profit? They should listen closely to Pier 1 Imports CEO Alex Smith's sobering remarks. The home furnishings retailer's stock slumped as much as 18 percent in its biggest daily percentage drop in almost five years on Thursday after its second-quarter profit and sales missed Wall Street expectations. While profit was partly hurt by increased online spending, increased storewide promotions were the big culprit that hurt margins.