KIRKLAND'S, INC. NASHVILLE, Tenn., Nov. 19, 2015 /PRNewswire/ -- Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the 13-week and 39-week periods ended October 31, 2015.
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Net sales for the 13 weeks ended October 31, 2015, increased 10.3% to $129.2 million compared with $117.2 million for the 13 weeks ended November 1, 2014. Comparable store sales for the third quarter of fiscal 2015, including e-commerce sales, increased 1.8% compared with a comparable store sales increase of 6.3% in the prior-year quarter. Kirkland's opened 21 stores and closed two during the third quarter of 2015, bringing the total number of stores to 370 at quarter end.
Net sales for the 39 weeks ended October 31, 2015, increased 10.3% to $362.8 million compared with $328.9 million for the 39 weeks ended November 1, 2014. Comparable store sales, including e-commerce sales, increased 3.7% for the 39 weeks ended October 31, 2015 compared with an increase of 5.0% in the prior-year period. Kirkland's opened 31 stores and closed five during the 39-week period.
For the 13 weeks ended October 31, 2015, the Company reported a net loss of $0.3 million, or ($0.02) per diluted share. The loss includes a tax benefit of $0.02 per diluted share relating to state employment and investment credits. The Company reported net income of $1.3 million, or $0.07 per diluted share, for the 13 weeks ended November 1, 2014.
For the 39 weeks ended October 31, 2015, the Company reported a net loss of $0.03 million, or ($0.00) per diluted share, compared with net income of $2.3 million, or $0.13 per diluted share, for the 39 weeks ended November 1, 2014. Adjusted net income for the 39 weeks ended October 31, 2015 was $0.3 million, or $0.02 per diluted share. Adjusted net income for the 39 weeks ended October 31, 2015 excludes a $0.02 per diluted share charge in the first quarter of 2015 related to the retirement of the Company's previous CEO.
Mike Madden, Kirkland's President and Chief Executive Officer, said, "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."
Mr. Madden continued, "Our revised guidance assumes traffic challenges persist. Yet the bulk of the holiday selling season is ahead of us and we believe we have a strong and engaging holiday assortment as evidenced by our continued strength in conversion. We're also encouraged by the performance of our 2015 class of stores and will enter Thanksgiving with 11% more stores open versus last year."
Updated Fiscal 2015 Outlook
Earnings: Based on the Company's sales and
earnings performance to date in
fiscal 2015, the Company now
expects adjusted fiscal 2015
earnings per diluted share to be
in the range of $0.89 to $0.96,
excluding a $0.02 per diluted
share charge related to the
retirement of the Company's
previous CEO. This full year
guidance implies an earnings
expectation in the range of $0.88
to $0.95 per diluted share for
the 13 weeks ending January 30,
2016 (the "fourth quarter"). The
Company expects its full year tax
rate to be approximately 38.5%.
Store Growth: For the fourth quarter, the
Company expects to open 11 stores
and close six stores. This
represents an 11% increase in
total stores open by Thanksgiving
compared with last year. For
fiscal 2015, this totals 42 new
store openings and 11 store
closings.
Sales: The Company expects total sales
for the fourth quarter to range
between $197 and $200 million.
This implies a comparable store
sales increase of flat to up 2%.
Total sales for fiscal 2015 are
expected to increase
approximately 10% to 11% compared
with fiscal 2014. This level of
sales performance would imply a
comparable store sales increase
in the range of 2% to 3% for
fiscal 2015.
Margin & Expenses: The fourth quarter earnings
forecast implies a decline in
year-over-year gross profit
margin. Operating expenses are
expected to increase on a dollar
basis due to the increase in
stores, but decline as a
percentage of sales for the
fourth quarter. For the full
year, the Company expects a
modest decline in its operating
margin due to lower merchandise
margins and higher supply chain
costs.
Cash Flow: Capital expenditures in fiscal
2015 are estimated to range
between $32 million and $34
million compared with $30 million
in fiscal 2014.
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call today, November 19, 2015, 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 Friday, November 27, 2015, by dialing (412) 317-0088 and entering the confirmation number, 10075182.
A live broadcast of Kirkland's quarterly conference call will be available online at the Company's website www.kirklands.com under Investor Relations or https://www.webcaster4.com/Webcast/Page/957/11331 on November 19, 2015, beginning at 11:00 a.m. Eastern time. 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 379 stores in 35 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, product availability and growth opportunities, seasonal fluctuations, 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 14, 2015. 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
October 31, November 1,
2015 2014
---- ----
Net sales $129,238 $117,198
Cost of sales 81,137 71,446
------ ------
Gross profit 48,101 45,752
Operating expenses:
Operating expenses 43,476 39,111
Depreciation 5,557 4,670
----- -----
Operating income (loss) (932) 1,971
Other expense, net 12 1
--- ---
Income (loss) before income taxes (944) 1,970
Income tax expense (benefit) (674) 710
---- ---
Net income (loss) $(270) $1,260
===== ======
Earnings (loss) per
share:
Basic $(0.02) $0.07
====== =====
Diluted $(0.02) $0.07
====== =====
Shares used to calculate
earnings (loss) per
share:
Basic 17,243 17,258
====== ======
Diluted 17,243 17,734
====== ======
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
39-Week 39-Week
Period Ended Period Ended
October 31, November 1,
2015 2014
---- ----
Net sales $362,837 $328,938
Cost of sales 224,561 202,711
------- -------
Gross profit 138,276 126,227
Operating expenses:
Operating expenses 122,717 109,367
Depreciation 16,096 13,401
------ ------
Operating income (loss) (537) 3,459
Other expense (income), net 41 (171)
--- ----
Income (loss) before income taxes (578) 3,630
Income tax expense (benefit) (549) 1,370
---- -----
Net income (loss) $(29) $2,260
==== ======
Earnings (loss) per
share:
Basic $(0.00) $0.13
====== =====
Diluted $(0.00) $0.13
====== =====
Shares used to calculate
earnings (loss) per
share:
Basic 17,252 17,300
====== ======
Diluted 17,252 17,799
====== ======
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
October 31, January 31, November 1,
2015 2015 2014
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents $32,358 $99,138 $56,642
Inventories, net 95,460 55,775 77,456
Deferred income taxes 3,522 3,538 2,969
Other current assets 18,056 8,878 12,549
------ ----- ------
Total current assets 149,396 167,329 149,616
Property and equipment, net 107,000 90,992 90,683
Other assets 2,107 2,166 2,125
----- ----- -----
Total assets $258,503 $260,487 $242,424
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $53,962 $24,705 $32,049
Income taxes payable - 5,648 -
Other current liabilities 26,927 27,027 25,296
------ ------ ------
Total current liabilities 80,889 57,380 57,345
Non-current deferred income taxes 4,279 4,138 3,116
Deferred rent and other long-term
liabilities 51,896 47,907 46,305
------ ------ ------
Total liabilities 137,064 109,425 106,766
------- ------- -------
Net shareholders' equity 121,439 151,062 135,658
------- ------- -------
Total liabilities and shareholders'
equity $258,503 $260,487 $242,424
======== ======== ========
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
39-Week 39-Week
Period Ended Period Ended
October 31, November 1,
2015 2014
---- ----
Net cash used in:
Operating activities $(8,584) $(4,473)
Investing activities (25,721) (24,049)
Financing activities (32,475) (3,886)
--------
Cash and cash equivalents:
Net decrease (66,780) (32,408)
Beginning of the period 99,138 89,050
------
End of the period $32,358 $56,642
=======
Contact:
Kirkland's SCR Partners
Adam Holland Jeff Black: (615) 760-3679
(615) 872-4800 Tripp Sullivan: (615) 760-1104
IR@Kirklands.com
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SOURCE Kirkland's, Inc.
