KIRKLAND'S, INC. NASHVILLE, Tenn., Aug. 23, 2016 /PRNewswire/ -- Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the 13-week and 26-week periods ended July 30, 2016.
https://photos.prnewswire.com/prnvar/20150311/181194LOGO
Net sales for the 13 weeks ended July 30, 2016 increased 6.7% to $123.0 million compared with $115.3 million for the 13 weeks ended August 1, 2015. Comparable store sales for the second quarter of fiscal 2016, including e-commerce sales, decreased 4.3% compared with a comparable store sales increase of 6.7% in the prior-year quarter. Kirkland's opened 13 stores and closed 4 stores during the second quarter, bringing the total number of stores to 391 at quarter end.
Net sales for the 26 weeks ended July 30, 2016, increased 8.3% to $252.9 million compared with $233.6 million for the 26 weeks ended August 1, 2015. Comparable store sales, including e-commerce, for the 26 weeks ended July 30, 2016 decreased 1.8% compared with an increase of 4.8% in the prior-year period. Kirkland's opened 27 stores and closed 12 during the 26-week period.
For the 13 weeks ended July 30, 2016, the Company reported a net loss of $3.6 million, or ($0.22) per diluted share compared with a net loss of $2.3 million, or ($0.13) per diluted share, for the 13 weeks ended August 1, 2015. For the 26 weeks ended July 30, 2016, the Company reported a net loss of $2.7 million, or ($0.17) per diluted share compared with net income of $0.2 million, or $0.01 per diluted share, for the 26 weeks ended August 1, 2015.
"The second quarter was challenging as our retail locations experienced weak traffic," said Mike Madden, President and Chief Executive Officer. "E-commerce revenue increased a strong 37% in the quarter, and we're on track to meet our store opening plans for 2016. Operating costs as a percentage of sales declined, reflecting efforts to tightly manage store and corporate expenses. Gross margin was impacted by deleverage of store occupancy and distribution costs."
"Traffic remains under pressure as we enter the second half and we've adjusted our full-year guidance to incorporate a more conservative outlook," continued Mr. Madden. "Our seasonal merchandise is performing well thus far and we have planned deeper buys in categories that are trending favorably. Our fall marketing campaign reflects a better balance of value and inspiration, and we're making improvements to our omni-channel delivery and execution. We're confident these initiatives can improve our sales performance and we'll continue to control our expenses and inventories as traffic issues persist. With further execution on our strategy, Kirkland's is well positioned to deliver stronger sales and earnings growth over the long term."
Fiscal 2016 Outlook
Kirkland's is updating its outlook for fiscal 2016 as follows:
For the 52-week period ending
January 28, 2017 ("fiscal 2016"),
the Company expects to achieve
approximately 7% to 9% square
footage growth with 40 to 42 new
store openings and 15 to 18 store
Store Growth: closings.
Total sales for fiscal 2016 are
expected to increase
approximately 7% to 8% compared
with fiscal 2015, driven
primarily by new store openings.
This level of sales performance
assumes that brick & mortar
traffic trends remain
challenging, resulting in low-
single-digit negative to flat
comparable store sales for the
Sales: balance of 2016.
The Company expects its gross
profit margin to decline year-
over-year given an increase in
supply chain and store occupancy
costs, slightly offset by a
higher merchandise margin.
Operating expenses are expected
to increase slightly as a percent
of sales. For the full year, the
Company expects a contraction in
Margin & Expenses: its operating margin.
Based on the above assumptions,
the Company expects fiscal 2016
earnings per share to be in the
range of $0.70 to $0.80. The full
year earnings projection assumes
a tax rate of approximately 38.5%
and excludes any potential share
Earnings: repurchases.
Capital expenditures in fiscal
2016, which we expect to be
driven primarily by new store
openings and continued
investments in omni-channel and
supply chain initiatives, are
estimated to range between $28
million and $31 million compared
Cash Flow: with $35 million in fiscal 2015.
This updated performance outlook is based on current information as of August 23, 2016. The information on which this outlook is based is subject to change and the Company may update its full year business outlook or any portion thereof at any time for any reason.
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call today, August 23, 2016, at 11:00 a.m. ET. The number to call for the interactive teleconference is (412) 542-4163. A replay of the conference call will be available through Tuesday, August 30, 2016, by dialing (412) 317-0088 and entering the confirmation number, 10090828.
A live broadcast of Kirkland's quarterly conference call will be available online at ir.kirklands.com or https://www.webcaster4.com/Webcast/Page/957/16514 on August 23, 2016, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for one year.
About Kirkland's, Inc.
Kirkland's, Inc. was founded in 1966 and is a specialty retailer of home décor in the United States. Although originally focused in the Southeast, the Company has grown beyond that region and currently operates 392 stores in 36 states. The Company's stores present a broad selection of distinctive merchandise, including framed art, mirrors, candles, lamps, picture frames, accent rugs, garden accessories and artificial floral products. The Company's stores also offer an extensive assortment of gifts, as well as seasonal merchandise. More information can be found at www.kirklands.com.
Forward-Looking Statements
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Kirkland's actual results to differ materially from forecasted results. Those risks and uncertainties include, among other things, the competitive environment in the home décor industry in general and in Kirkland's specific market areas, inflation, fluctuations in cost and availability of products, interruptions in supply chain and distribution systems, the ability to control employment, and other operating costs, availability of suitable retail locations and other growth opportunities, disruptions in information technology systems including the potential for security breaches of Kirkland's or its customers' information, seasonal fluctuations in consumer spending, and economic conditions in general. Those and other risks are more fully described in Kirkland's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K filed on April 8, 2016. Kirkland's disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
13-Week 13-Week
Period Ended Period Ended
July 30, August 1,
2016 2015
---- ----
Net sales $123,017 $115,289
Cost of sales 80,744 72,777
------ ------
Gross profit 42,273 42,512
Operating expenses:
Operating expenses 41,873 40,904
Depreciation 6,295 5,310
----- -----
Operating loss (5,895) (3,702)
Other expense, net 14 14
--- ---
Loss before income
taxes (5,909) (3,716)
Income tax benefit (2,342) (1,428)
------ ------
Net loss $(3,567) $(2,288)
======= =======
Loss per share:
Basic $(0.22) $(0.13)
====== ======
Diluted $(0.22) $(0.13)
====== ======
Shares used to calculate loss per share:
Basic 15,854 17,277
====== ======
Diluted 15,854 17,277
====== ======
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
26-Week 26-Week
Period Ended Period Ended
July 30, August 1,
2016 2015
---- ----
Net sales $252,928 $233,599
Cost of sales 161,118 143,424
------- -------
Gross profit 91,810 90,175
Operating expenses:
Operating expenses 83,913 79,241
Depreciation 12,268 10,539
------ ------
Operating (loss)
income (4,371) 395
Other expense, net 28 29
--- ---
(Loss) income
before income
taxes (4,399) 366
Income tax
(benefit) expense (1,748) 125
------ ---
Net (loss) income $(2,651) $241
======= ====
(Loss) earnings per share:
Basic $(0.17) $0.01
====== =====
Diluted $(0.17) $0.01
====== =====
Shares used to calculate (loss) earnings per share:
Basic 15,817 17,257
====== ======
Diluted 15,817 17,755
====== ======
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
July 30, January 30, August 1,
2016 2016 2015
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents $29,581 $44,352 $49,126
Inventories, net 74,166 68,222 65,895
Other current assets 19,874 15,206 14,501
------ ------ ------
Total current assets 123,621 127,780 129,522
Property and equipment, net 112,157 105,542 94,904
Other assets 3,184 1,934 2,565
----- ----- -----
Total assets $238,962 $235,256 $226,991
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $32,384 $28,689 $27,951
Income taxes payable - 4,863 -
Other current liabilities 26,446 25,943 25,319
------ ------ ------
Total current liabilities 58,830 59,495 53,270
Non-current deferred income taxes 1,784 1,342 578
Deferred rent and other long-term liabilities 59,795 54,724 48,851
------ ------ ------
Total liabilities 120,409 115,561 102,699
------- ------- -------
Net shareholders' equity 118,553 119,695 124,292
------- ------- -------
Total liabilities and shareholders' equity $238,962 $235,256 $226,991
======== ======== ========
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
26-Week 26-Week
Period Ended Period Ended
July 30, August 1,
2016 2015
---- ----
Net cash provided by (used in):
Operating activities $5,125 $(10,195)
Investing activities (19,629) (10,755)
Financing activities (267) (29,062)
-----
Cash and cash equivalents:
Net decrease (14,771) (50,012)
Beginning of the period 44,352 99,138
------
End of the period $29,581 $49,126
=======
Contact: Kirkland's SCR Partners
Adam Holland Jeff Black: (615) 760-3679
(615) 872-4800 Tripp Sullivan: (615) 760-1104
IR@Kirklands.com
Logo - http://photos.prnewswire.com/prnh/20150311/181194LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kirklands-reports-second-quarter-2016-results-300316800.html
SOURCE Kirkland's, Inc.
