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Kirkland's (KIRK) to Post Q4 Earnings: What's in the Cards?
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Kirkland’s Inc. (KIRK - Free Report) is set to report fourth-quarter fiscal 2016 results on Mar 10, 2017 before the market opens. The company crushed estimates in the third quarter by 50% after posting negative surprises for two consecutive quarters.
The question lingering in investors’ minds now is, whether Kirkland’s will be able to post positive earnings surprise in the quarter to be reported. In the trailing four quarters, Kirkland’s has outperformed the Zacks Consensus Estimate by an average of 3.26%. The current Zacks Consensus Estimate for the quarter is pegged at 80 cents, reflecting a year-over-year decline of 17.2%. Analysts polled by Zacks expect revenues of $203.2 million, increasing 2.1% from the year-ago quarter.
Let's see how things are shaping up prior to this announcement.
Factors to Consider
The home furnishing sector has been benefiting recently from an uptick in the construction sector. During the fourth quarter, the construction sector was fairly upbeat with reports of higher sales of new single-family houses along with mid-single digit growth in housing starts. Homebuilders like Lennar Corporation (LEN - Free Report) and KB Home (KBH - Free Report) reported better-than-expected fourth-quarter results, beating estimates for both earnings and sales, which raise optimism. Further, healthier economy, improving employment levels, positive consumer confidence and tight supply situation are also encouraging signs for these stocks.
In addition to home construction, the home remodeling market has also picked up pace during the fourth quarter. Improved construction and remodeling activity increased demand for home furnishing products.
Coming to Kirkland’s, it has been taking all possible measures to bring about a turnaround in business. Recently, management has taken several strategic initiatives to improve traffic at stores. In this regard, the company identified certain core focus areas, which include improving in-store productivity, enhancing omni-channel platform, optimizing real estate and reinforcing a culture of continuous improvement.
Further, the company has ramped up marketing efforts to support near-term traffic driving initiatives. It has also started providing free shipping to customers who fulfill certain conditions. This trend is anticipated to help Kirkland’s post top-line improvement in to-be-reported quarter.
Kirkland’s has been struggling with low traffic in the trailing five quarters, primarily owing to more and more people getting inclined toward online buying. In order to match up to the trend, the company is also focusing on eCommerce, but is still trailing way behind the online giant Amazon.com Inc. (AMZN - Free Report) to pose any discernible threat. Moreover, it is experiencing lower margins due to lower-store supplies, higher marketing costs and corporate related expenses. The rise in store occupancy costs resulted from increased shipping and packaging expenses, which in turn, have put margins under pressure. This trend is likely to continue in fourth-quarter 2016 as well.
If we look at the share price movement of the company we notice the stock has exhibited a disappointing performance over the last three months. The stock has declined 32% in the past three months wider than Retail-Home-Furnishing industry which has declined 16% over the same time frame.
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 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimates. However, that is not the case here as you will see below:
Zacks ESP: Earnings ESP for Kirkland’s is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Kirkland’s currently carries a Zacks Rank #3. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock to Consider
A stock in the retail companies that has both a positive Earnings ESP and a favorable Zacks Rank is:
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Kirkland's (KIRK) to Post Q4 Earnings: What's in the Cards?
Kirkland’s Inc. (KIRK - Free Report) is set to report fourth-quarter fiscal 2016 results on Mar 10, 2017 before the market opens. The company crushed estimates in the third quarter by 50% after posting negative surprises for two consecutive quarters.
The question lingering in investors’ minds now is, whether Kirkland’s will be able to post positive earnings surprise in the quarter to be reported. In the trailing four quarters, Kirkland’s has outperformed the Zacks Consensus Estimate by an average of 3.26%. The current Zacks Consensus Estimate for the quarter is pegged at 80 cents, reflecting a year-over-year decline of 17.2%. Analysts polled by Zacks expect revenues of $203.2 million, increasing 2.1% from the year-ago quarter.
Let's see how things are shaping up prior to this announcement.
Factors to Consider
The home furnishing sector has been benefiting recently from an uptick in the construction sector. During the fourth quarter, the construction sector was fairly upbeat with reports of higher sales of new single-family houses along with mid-single digit growth in housing starts. Homebuilders like Lennar Corporation (LEN - Free Report) and KB Home (KBH - Free Report) reported better-than-expected fourth-quarter results, beating estimates for both earnings and sales, which raise optimism. Further, healthier economy, improving employment levels, positive consumer confidence and tight supply situation are also encouraging signs for these stocks.
In addition to home construction, the home remodeling market has also picked up pace during the fourth quarter. Improved construction and remodeling activity increased demand for home furnishing products.
Coming to Kirkland’s, it has been taking all possible measures to bring about a turnaround in business. Recently, management has taken several strategic initiatives to improve traffic at stores. In this regard, the company identified certain core focus areas, which include improving in-store productivity, enhancing omni-channel platform, optimizing real estate and reinforcing a culture of continuous improvement.
Kirkland's, Inc. Price and EPS Surprise
Kirkland's, Inc. Price and EPS Surprise | Kirkland's, Inc. Quote
Further, the company has ramped up marketing efforts to support near-term traffic driving initiatives. It has also started providing free shipping to customers who fulfill certain conditions. This trend is anticipated to help Kirkland’s post top-line improvement in to-be-reported quarter.
Kirkland’s has been struggling with low traffic in the trailing five quarters, primarily owing to more and more people getting inclined toward online buying. In order to match up to the trend, the company is also focusing on eCommerce, but is still trailing way behind the online giant Amazon.com Inc. (AMZN - Free Report) to pose any discernible threat. Moreover, it is experiencing lower margins due to lower-store supplies, higher marketing costs and corporate related expenses. The rise in store occupancy costs resulted from increased shipping and packaging expenses, which in turn, have put margins under pressure. This trend is likely to continue in fourth-quarter 2016 as well.
If we look at the share price movement of the company we notice the stock has exhibited a disappointing performance over the last three months. The stock has declined 32% in the past three months wider than Retail-Home-Furnishing industry which has declined 16% over the same time frame.
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 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimates. However, that is not the case here as you will see below:
Zacks ESP: Earnings ESP for Kirkland’s is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: Kirkland’s currently carries a Zacks Rank #3. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock to Consider
A stock in the retail companies that has both a positive Earnings ESP and a favorable Zacks Rank is:
CarMax Inc. (KMX - Free Report) with an Earnings ESP of +1.27% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>