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Is This the Right Time to Offload Kirkland (KIRK) Stock?
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Home furnishing stock Kirkland’s Inc. (KIRK - Free Report) has been suffering losses for quite some time now due to significantly lower revenues. The company carries a Zacks Rank #4 (Sell). Moreover, the company has had a poor run in the last three months with its share price declining around 13.10%. Over the past 30 days, estimates for fiscal 2016 dropped around 30%, while that for fiscal 2017 fell 24.8%. Hence, we feel that the stock should be offloaded now.
Second-Quarter Results: Kirkland’s reported second-quarter fiscal 2016 adjusted loss of 22 cents per share, which was wider than the Zacks Consensus Estimate 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. Although net sales increased 6.7% year over year, it missed the consensus mark by 2.4% due to lower comps. Further, Kirkland's has missed estimates in three of the last four quarter with an average surprise of a negative 59.25%.
Traffic Trends: Kirkland’s has been experiencing low traffic over the past few months and expects the trend to persist in fiscal 2016 as more consumers are resorting to online shopping. The company even lowered its fiscal guidance anticipating strained traffic in the second half of fiscal 2016.
Operating Expenses: Kirkland’s has been incurring higher operating expenses for several quarters now due to an increase in store occupancy costs. The higher costs resulted from increased shipping and packaging expenses, which have put margins under pressure. The company’s aggressive expansion of store locations is expected to raise store occupancy costs. Also, the company’s plans to increase supply chain capabilities would boost costs.
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).
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Is This the Right Time to Offload Kirkland (KIRK) Stock?
Home furnishing stock Kirkland’s Inc. (KIRK - Free Report) has been suffering losses for quite some time now due to significantly lower revenues. The company carries a Zacks Rank #4 (Sell). Moreover, the company has had a poor run in the last three months with its share price declining around 13.10%. Over the past 30 days, estimates for fiscal 2016 dropped around 30%, while that for fiscal 2017 fell 24.8%. Hence, we feel that the stock should be offloaded now.
Second-Quarter Results: Kirkland’s reported second-quarter fiscal 2016 adjusted loss of 22 cents per share, which was wider than the Zacks Consensus Estimate 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. Although net sales increased 6.7% year over year, it missed the consensus mark by 2.4% due to lower comps. Further, Kirkland's has missed estimates in three of the last four quarter with an average surprise of a negative 59.25%.
KIRKLANDS INC Price, Consensus and EPS Surprise
KIRKLANDS INC Price, Consensus and EPS Surprise | KIRKLANDS INC Quote
Traffic Trends: Kirkland’s has been experiencing low traffic over the past few months and expects the trend to persist in fiscal 2016 as more consumers are resorting to online shopping. The company even lowered its fiscal guidance anticipating strained traffic in the second half of fiscal 2016.
Operating Expenses: Kirkland’s has been incurring higher operating expenses for several quarters now due to an increase in store occupancy costs. The higher costs resulted from increased shipping and packaging expenses, which have put margins under pressure. The company’s aggressive expansion of store locations is expected to raise store occupancy costs. Also, the company’s plans to increase supply chain capabilities would boost costs.
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).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>