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.
Operating Costs Likely to Hurt Kirkland's (KIRK) Q3 Earnings
Read MoreHide Full Article
Kirkland's, Inc. (KIRK - Free Report) is slated to report third-quarter fiscal 2017 results on Nov 21, before the market opens.
We expect the company to gain from its expanding e-commerce business. However, rising operating expenses stemming from business expansion efforts is likely to dent the company’s margins in the upcoming quarterly release.
Notably, the company’s bottom line has lagged the Zacks Consensus Estimate in three of the trailing four quarters, with an average miss of 12.1%.
Let’s look into some factors that are likely to impact the third-quarter performance of this specialty retailer of home decor products.
What to Expect?
The Zacks Consensus Estimate for the third quarter is pegged at a loss of 7 cents per share, which is wider than the year-ago loss of 5 cents. Further, the consensus estimate has widened by a penny in the past 30 days.
Nevertheless, analysts polled by Zacks expect revenues of $144.2 million, improving 4.3% from the prior-year period.
Kirkland's, Inc. Price, Consensus and EPS Surprise
Kirkland’s has been struggling with increased store occupancy costs, due to aggressive store expansion strategies. This has led to higher operating expenses in the last few quarters. Such headwinds are well reflected in the company’s price performance. The stock has declined 12.9% in the past year, as against the industry’s rally of 4.4%.
Higher costs can also be attributed to increased shipping, store payroll, advertising and packaging costs. Such expenditures are likely to hurt the company’s bottom-line performance. Further, costs associated with Kirkland’s supply-chain and omni-channel expansions may mar the bottom line in the to-be-reported quarter.
However, Kirkland’s has been closing smaller and underperforming stores in malls to reduce costs and enhance efficiency. Additionally, the company plans to open bigger off-mall stores at popular locations, which are likely to boost sales. Incidentally, Kirkland’s intends to inaugurate 25-30 stores and close 20 in fiscal 2017. Furthermore, the company is on track with its initiatives to improve merchandise margins.
Kirkland’s has also been gaining from sturdy growth in e-commerce platform. Management expects e-commerce business to grow at a greater pace than its brick-and-mortar stores and contribute significantly to top-line growth. In order to support the momentum of its online business, Kirkland’s has rolled out several new information systems to improve online purchasing and planning.
Although Kirkland’s has been taking several initiatives to revive performance, we believe it will take time for the company to offset rising costs.
What Does the Zacks Model Unveil?
Our proven model does not show that Kirkland's is likely to beat estimates this quarter. This is because a stock needs to have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as well as a positive Earnings ESP for this to happen.
Although Kirkland carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combinations
Here are some companies which, according to our model, have the right combination of elements to deliver earnings beat.
Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank #2.
PVH Corp. (PVH - Free Report) has an Earnings ESP of +0.10% and carries a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Operating Costs Likely to Hurt Kirkland's (KIRK) Q3 Earnings
Kirkland's, Inc. (KIRK - Free Report) is slated to report third-quarter fiscal 2017 results on Nov 21, before the market opens.
We expect the company to gain from its expanding e-commerce business. However, rising operating expenses stemming from business expansion efforts is likely to dent the company’s margins in the upcoming quarterly release.
Notably, the company’s bottom line has lagged the Zacks Consensus Estimate in three of the trailing four quarters, with an average miss of 12.1%.
Let’s look into some factors that are likely to impact the third-quarter performance of this specialty retailer of home decor products.
What to Expect?
The Zacks Consensus Estimate for the third quarter is pegged at a loss of 7 cents per share, which is wider than the year-ago loss of 5 cents. Further, the consensus estimate has widened by a penny in the past 30 days.
Nevertheless, analysts polled by Zacks expect revenues of $144.2 million, improving 4.3% from the prior-year period.
Kirkland's, Inc. Price, Consensus and EPS Surprise
Kirkland's, Inc. Price, Consensus and EPS Surprise | Kirkland's, Inc. Quote
Factors Impacting the Quarter
Kirkland’s has been struggling with increased store occupancy costs, due to aggressive store expansion strategies. This has led to higher operating expenses in the last few quarters. Such headwinds are well reflected in the company’s price performance. The stock has declined 12.9% in the past year, as against the industry’s rally of 4.4%.
Higher costs can also be attributed to increased shipping, store payroll, advertising and packaging costs. Such expenditures are likely to hurt the company’s bottom-line performance. Further, costs associated with Kirkland’s supply-chain and omni-channel expansions may mar the bottom line in the to-be-reported quarter.
However, Kirkland’s has been closing smaller and underperforming stores in malls to reduce costs and enhance efficiency. Additionally, the company plans to open bigger off-mall stores at popular locations, which are likely to boost sales. Incidentally, Kirkland’s intends to inaugurate 25-30 stores and close 20 in fiscal 2017. Furthermore, the company is on track with its initiatives to improve merchandise margins.
Kirkland’s has also been gaining from sturdy growth in e-commerce platform. Management expects e-commerce business to grow at a greater pace than its brick-and-mortar stores and contribute significantly to top-line growth. In order to support the momentum of its online business, Kirkland’s has rolled out several new information systems to improve online purchasing and planning.
Although Kirkland’s has been taking several initiatives to revive performance, we believe it will take time for the company to offset rising costs.
What Does the Zacks Model Unveil?
Our proven model does not show that Kirkland's is likely to beat estimates this quarter. This is because a stock needs to have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as well as a positive Earnings ESP for this to happen.
Although Kirkland carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combinations
Here are some companies which, according to our model, have the right combination of elements to deliver earnings beat.
Zumiez Inc (ZUMZ - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank #2.
PVH Corp. (PVH - Free Report) has an Earnings ESP of +0.10% and carries a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>