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Kirkland's (KIRK) Slips to Sell: What's Taking it Down?
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Home furnishing retailer, Kirkland’s Inc. (KIRK - Free Report) has slipped to the red due to the headwinds plaguing the company of late. The shares have declined 28.5% in the past three months, underperforming the Zacks categorized Retail-Home Furnishing industry which has witnessed a decrease of 16.6% during the same time frame.
What’s wrong with the Stock?
The company has been grappling with low traffic in the past six quarters as more and more people are getting inclined toward online buying. In order to match up the trend, the company is also focusing on eCommerce, but it is still trailing way behind the online giant Amazon.com Inc. (AMZN - Free Report) to pose any discernible threat.
Further, on Mar 10, 2017, the company reported sluggish fourth-quarter fiscal 2017 results, wherein consolidated comparable store sales declined 4.6% compared with an increase of 1.3% registered in the prior-year period. Although earnings of 83 cents beat estimates, it declined 14% from the year ago quarter mainly due to lower margins. Gross profit decreased 1.6% to $79.2 million owing to higher cost of sales. Operating income declined 14% to $22.9 million due to lower-store supplies, marketing costs and corporate related expenses.
We note that the company is experiencing lower margins owing to lower-store supplies, higher marketing costs and corporate related expenses. The higher costs resulting from increased shipping and packaging expenses have also put margins under further pressure.The Zacks Rank #4 (Sell) company’s aggressive expansion of store locations is anticipated to raise store occupancy costs.
The soft fourth-quarter results have prompted analysts to lower fiscal 2018 estimates. One of the two estimates were revised downward in the last seven days as a result of which fiscal 2018 earnings estimates declined 3.1% during the time frame.
While Burlington Stores has an expected earnings growth of 19.9%, At Home has an expected earnings growth rate of 10.5% and 25%, respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Kirkland's (KIRK) Slips to Sell: What's Taking it Down?
Home furnishing retailer, Kirkland’s Inc. (KIRK - Free Report) has slipped to the red due to the headwinds plaguing the company of late. The shares have declined 28.5% in the past three months, underperforming the Zacks categorized Retail-Home Furnishing industry which has witnessed a decrease of 16.6% during the same time frame.
What’s wrong with the Stock?
The company has been grappling with low traffic in the past six quarters as more and more people are getting inclined toward online buying. In order to match up the trend, the company is also focusing on eCommerce, but it is still trailing way behind the online giant Amazon.com Inc. (AMZN - Free Report) to pose any discernible threat.
Further, on Mar 10, 2017, the company reported sluggish fourth-quarter fiscal 2017 results, wherein consolidated comparable store sales declined 4.6% compared with an increase of 1.3% registered in the prior-year period. Although earnings of 83 cents beat estimates, it declined 14% from the year ago quarter mainly due to lower margins. Gross profit decreased 1.6% to $79.2 million owing to higher cost of sales. Operating income declined 14% to $22.9 million due to lower-store supplies, marketing costs and corporate related expenses.
We note that the company is experiencing lower margins owing to lower-store supplies, higher marketing costs and corporate related expenses. The higher costs resulting from increased shipping and packaging expenses have also put margins under further pressure.The Zacks Rank #4 (Sell) company’s aggressive expansion of store locations is anticipated to raise store occupancy costs.
The soft fourth-quarter results have prompted analysts to lower fiscal 2018 estimates. One of the two estimates were revised downward in the last seven days as a result of which fiscal 2018 earnings estimates declined 3.1% during the time frame.
Stock Picks
Some better-ranked stocks in the retail sector are Burlington Stores Inc. (BURL - Free Report) and At Home Group Inc. , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While Burlington Stores has an expected earnings growth of 19.9%, At Home has an expected earnings growth rate of 10.5% and 25%, respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>