) is scheduled to report its first quarter 2012 financial results
before the opening bell on Friday, May 18, 2012.
The current Zacks Consensus Estimate for the quarter is pegged
at 10 cents a share. The Zacks Consensus Estimate projects revenues
of $99 million for the quarter.
Fourth Quarter 2011 Recap
Kirkland's, which faces stiff competition from
The TJX Companies Inc
Ross Stores Inc
), posted earnings of 72 cents a share in 4Q11, which missed the
Zacks Consensus Estimate of 74 cents per share. Earnings were ahead
of the prior-year quarter's earnings of 66 cents.
For fiscal 2011, Kirkland's earnings of 91 cents per share
slipped 27.2% from the year-ago earnings.
Net sales went up 6.8% year over year to $149.1 million from
$139.6 million in the year-ago quarter.
On a year-over-year basis, gross profit expanded 8.5% to $64.1
million. Kirkland posted operating income of $24.1 million, as
against operating income of $22.2 million in the year-ago
Agreement of Estimate Revisions
Over the past 30 days, three of the four analysts covering
Kirkland's have lowered their estimates for the first quarter.
Likewise for fiscal 2012, three out of the four analysts have
revised their estimates downward.
The downward revision in estimates is not surprising as the
company has lowered its earnings guidance for the first quarter
2012 to 8 cents - 10 cents per diluted share from its prior
guidance of 11 cents - 14 cents.
The company reported a 1.2% decline in comparable-store sales
for the thirteen-weeks ended April 28, 2012, compared with an 8.4%
decline in the prior-year period. Kirkland's comparable-store sales
also slipped 1.3% for the nine-week period ended March 31, 2012,
compared with a decline of 8.9% in the prior-year period.
Magnitude of Estimate Revisions
Over the past 30 days, the first quarter earnings projection by
the Zacks Consensus Estimate has decreased from 12 cents to 10
cents per share. For fiscal 2012, the estimate decreased by 5 cents
to $1.06 over the same period.
The overall negative revisions by analysts indicate skyrocketing
inflation, high cotton prices, consecutive decline in same store
sales and downward guidance revision by the company.
Earnings Surprise History
With respect to earnings surprises, Kirkland's has topped the
Zacks Consensus Estimate in two of the preceding four quarters.
Over the last four quarters, its earnings surprise ranged from a
negative 200.00% to a positive 50.00%, with the average earnings
surprise being a negative 44.87%.
Kirkland's lean inventory and over dependence on vendors has
inherent risks which can affect the company's operating
performance. Moreover, skyrocketing inflation, high cotton prices
and slow recovery of global economy is crippling the company's
margins. Declining comparable store sales and lowered guidance is
also not encouraging for investors.
Currently, we have a long-term Underperform recommendation on
Kirkland's, which carries a Zacks #5 Rank (short term Strong Sell
KIRKLANDS INC (KIRK): Free Stock Analysis
ROSS STORES (ROST): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis
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