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Will High Expenses Hit Kirkland's (KIRK) Earnings in Q1?
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Home furnishing retailer Kirkland’s Inc. (KIRK - Free Report) is set to report first-quarter fiscal 2016 results on May 24. Last quarter, the company posted a 7.8% positive surprise. Let us see how things are shaping up for this announcement.
The company’s earnings have missed the Zacks Consensus Estimate in two of the trailing four quarters, with an average negative surprise of 41.24%.
Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
The home furnishing sector has suffered a setback recently mainly due to the sluggish turnover of the housing sector. Meanwhile, although consumer spending in the U.S. is showing improvement, the consumer is cautious and has not increased discretionary spending to a substantial extent.
Moreover, retailers recorded substantially low comps in the first quarter as an increasing number of customers are resorting to online shopping. This trend is expected to hurt Kirkland’s as well, which will get reflected in the to-be reported quarter’s comps figure.
Further, Kirkland’s has been incurring high operating expenses over several quarters owing to an increase in store occupancy costs.The upside in costs store occupancy costs resulted from increased shipping and packaging expenses, which have in turn put margins under pressure.
Earnings Whispers
Our proven model does not conclusively show that Kirkland’s is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. However, that is not the case here due to the following factors:
Zacks ESP: ESP for KIRK is -10.00% as the Most Accurate estimate stands at an earnings of 9 cents while the Zacks Consensus Estimate is pegged at 10 cents.
Zacks Rank: Kirkland’s has a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Stocks in the broader retail sector that have a positive earnings ESP and a favorable Zacks Rank are:
Best Buy Inc. (BBY - Free Report) , with an earnings ESP of +2.86% and a Zacks Rank #2 (Buy).
Chuy’s Holdings Inc. (CHUY - Free Report) , with an earnings ESP of +3.23% and a Zacks Rank #2.
Amazon.com Inc. (AMZN - Free Report) , with an earnings ESP of +1.8% and a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Will High Expenses Hit Kirkland's (KIRK) Earnings in Q1?
Home furnishing retailer Kirkland’s Inc. (KIRK - Free Report) is set to report first-quarter fiscal 2016 results on May 24. Last quarter, the company posted a 7.8% positive surprise. Let us see how things are shaping up for this announcement.
The company’s earnings have missed the Zacks Consensus Estimate in two of the trailing four quarters, with an average negative surprise of 41.24%.
KIRKLANDS INC Price and EPS Surprise
KIRKLANDS INC Price and EPS Surprise | KIRKLANDS INC Quote
Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
The home furnishing sector has suffered a setback recently mainly due to the sluggish turnover of the housing sector. Meanwhile, although consumer spending in the U.S. is showing improvement, the consumer is cautious and has not increased discretionary spending to a substantial extent.
Moreover, retailers recorded substantially low comps in the first quarter as an increasing number of customers are resorting to online shopping. This trend is expected to hurt Kirkland’s as well, which will get reflected in the to-be reported quarter’s comps figure.
Further, Kirkland’s has been incurring high operating expenses over several quarters owing to an increase in store occupancy costs.The upside in costs store occupancy costs resulted from increased shipping and packaging expenses, which have in turn put margins under pressure.
Earnings Whispers
Our proven model does not conclusively show that Kirkland’s is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. However, that is not the case here due to the following factors:
Zacks ESP: ESP for KIRK is -10.00% as the Most Accurate estimate stands at an earnings of 9 cents while the Zacks Consensus Estimate is pegged at 10 cents.
Zacks Rank: Kirkland’s has a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Stocks in the broader retail sector that have a positive earnings ESP and a favorable Zacks Rank are:
Best Buy Inc. (BBY - Free Report) , with an earnings ESP of +2.86% and a Zacks Rank #2 (Buy).
Chuy’s Holdings Inc. (CHUY - Free Report) , with an earnings ESP of +3.23% and a Zacks Rank #2.
Amazon.com Inc. (AMZN - Free Report) , with an earnings ESP of +1.8% and a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>