We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kirkland's (KIRK) Incurs Wider-than-Expected Loss in Q2
Read MoreHide Full Article
Kirkland's, Inc. (KIRK - Free Report) reported second-quarter fiscal 2016 adjusted loss of 22 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents. The loss was also wider than a loss of 13 cents per share incurred a year ago due to lower margins in the quarter.
Quarter in Detail
The home decor retailer’s net sales increased 6.7% to $123 million from $115.3 million in the year-ago quarter, backed by strong online sales. Categories like floral and seasonal performed in line with expectations. However, categories like art and ornamental wall décor underperformed during the quarter. Sales, however, lagged the Zacks Consensus Estimate of $126 million.
Including online sales, comparable store sales slipped 4.3%, much lower than the 6.7% increase in the previous year, due to soft traffic trends at its retail stores.
E-commerce revenues surged 37% in the quarter. Also, the company is on track to meet its store opening plans for 2016. Categories like furniture, art and wall décor are popular online and are driving sales in e-commerce.
Gross margin decreased approximately 251 basis points, to 34.4%. Gross margin was primarily driven by deleverage in occupancy and supply chain costs resulting from the sales mix.
The company incurred operating loss of $5.9 million, wider than a loss of $3.7 million a year ago, mainly due to higher healthcare and marketing expenses.
Kirkland's opened 13 and closed four stores during the fiscal second quarter, thereby taking the total number of stores to 391 at the end of the quarter.
Kirkland’s lowered its fiscal 2016 guidance as it expects the traffic to remain under pressure in the second half. It expects fiscal 2016 earnings per share within the range of 70 cents to 80 cents compared with a range of 98 cents to $1.11 projected previously.
Kirkland’s expects sales to increase 7–8% as against 10–12% expected earlier. The guidance assumes a low-single-digit comparable store sales increase.
The company intends to open 40 to 42 new store openings and intends to close 15 to 18 store in fiscal 2016.
Kirkland’s expects gross margins to decline year over year due to increase in supply chain and store occupancy costs. Operating margins are expected to shrink due to higher operating expenses for the year.
Kirkland’s carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the retail wholesale industry are Fortune Brands Home & Security, Inc. , Haverty Furniture Companies Inc. (HVT - Free Report) and Tempur Sealy International Inc. (TPX - Free Report) . While Tempur sports a Zacks Rank #1 (Strong Buy), both Haverty Furniture and Fortune Brands carry 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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Kirkland's (KIRK) Incurs Wider-than-Expected Loss in Q2
Kirkland's, Inc. (KIRK - Free Report) reported second-quarter fiscal 2016 adjusted loss of 22 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents. The loss was also wider than a loss of 13 cents per share incurred a year ago due to lower margins in the quarter.
Quarter in Detail
The home decor retailer’s net sales increased 6.7% to $123 million from $115.3 million in the year-ago quarter, backed by strong online sales. Categories like floral and seasonal performed in line with expectations. However, categories like art and ornamental wall décor underperformed during the quarter. Sales, however, lagged the Zacks Consensus Estimate of $126 million.
Including online sales, comparable store sales slipped 4.3%, much lower than the 6.7% increase in the previous year, due to soft traffic trends at its retail stores.
E-commerce revenues surged 37% in the quarter. Also, the company is on track to meet its store opening plans for 2016. Categories like furniture, art and wall décor are popular online and are driving sales in e-commerce.
Gross margin decreased approximately 251 basis points, to 34.4%. Gross margin was primarily driven by deleverage in occupancy and supply chain costs resulting from the sales mix.
The company incurred operating loss of $5.9 million, wider than a loss of $3.7 million a year ago, mainly due to higher healthcare and marketing expenses.
Kirkland's opened 13 and closed four stores during the fiscal second quarter, thereby taking the total number of stores to 391 at the end of the quarter.
KIRKLANDS INC Price, Consensus and EPS Surprise
KIRKLANDS INC Price, Consensus and EPS Surprise | KIRKLANDS INC Quote
Fiscal 2016 Guidance
Kirkland’s lowered its fiscal 2016 guidance as it expects the traffic to remain under pressure in the second half. It expects fiscal 2016 earnings per share within the range of 70 cents to 80 cents compared with a range of 98 cents to $1.11 projected previously.
Kirkland’s expects sales to increase 7–8% as against 10–12% expected earlier. The guidance assumes a low-single-digit comparable store sales increase.
The company intends to open 40 to 42 new store openings and intends to close 15 to 18 store in fiscal 2016.
Kirkland’s expects gross margins to decline year over year due to increase in supply chain and store occupancy costs. Operating margins are expected to shrink due to higher operating expenses for the year.
Kirkland’s carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the retail wholesale industry are Fortune Brands Home & Security, Inc. , Haverty Furniture Companies Inc. (HVT - Free Report) and Tempur Sealy International Inc. (TPX - Free Report) . While Tempur sports a Zacks Rank #1 (Strong Buy), both Haverty Furniture and Fortune Brands carry 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 >>