Retail

Kirkland's Earnings and Guidance Fall Short

Chris Lange

Published: November 19, 2015 11:05 am

Last Updated: January 13, 2020 4:59 pm

Kirkland’s Inc. (NASDAQ: KIRK) reported its fiscal third-quarter financial results before the markets opened on Thursday. The company had a net loss of $0.02 per share (EPS) on $129.2 million in revenue, which compared to consensus estimates from Thomson Reuters that call for $0.04 in earnings per share (EPS) on revenue of $131.27 million. In the same period of the previous year, the retailer posted EPS of $0.07 and $117.20 million in revenue.

In terms of guidance, the company expects to have $0.88 to $0.95 in EPS for the fourth quarter, as well as sales in the range of $197 million to $200 million. The consensus estimates are $1.12 in EPS on $200.51 million in revenue for the fiscal fourth quarter.

Ultimately, this revised guidance assumes that traffic challenges will persist within the company. The bulk of the holiday selling season is approaching; however, the company announced slightly weaker guidance when compared to estimates.

On the books, the company had cash and cash equivalents totaling $32.36 million at the end of its fiscal third quarter. That compared to $56.64 in the same period from the previous year.

Mike Madden, president and CEO of Kirkland’s, commented on earnings:

While our fall seasonal merchandise performed well and e-commerce revenues exceeded our expectations, we were disappointed with our third quarter results. Comparable sales were impacted by soft traffic including weakness in Texas, where we have our highest concentration of stores. Merchandise margins were lower due primarily to an increase in promotional activity to stimulate traffic and manage inventory levels, as well as higher supply chain costs.

Shares of Kirkland’s were last seen trading down about 28% at $14.59, with a consensus analyst price target of $32.17 and a 52-week trading range of $13.50 to $29.52.

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