Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell) on Feb 20 after it provided
disappointing preliminary sales data and a resultant cut in
Why the Downgrade?
Kirkland's has witnessed sharp downward estimate revisions
since it reported disappointing fourth-quarter 2013 sales
On Feb 12, Kirkland's reported preliminary sales results for
fourth-quarter fiscal 2013. Total sales during the period
declined 4.2% to $156.1 million compared with $162.9 million
for the fourth quarter of fiscal 2012. Sales also fell short of
management's expectation of a range of $159-$162 million.
The soft sales resulted from the unsuccessful execution of
Kirkland's' strategic initiatives, bad weather conditions and
reduced consumer spending during the holiday season.
Same-store sales remained flat year over year but fell short
of management's guidance of a comp growth of 2% to 4% announced
during the third-quarter earnings conference call.
Although Kirkland's witnessed a strong start to the quarter
with strong Nov 2013 and record sales during the Black Friday
weekend, bad weather and declines in comps during Dec 2013 and
Jan 2014, offset the initial gains.
Taking cue from the soft top line, Kirkland's lowered
fourth-quarter earnings guidance range to 66-68 cents from 77-82
cents announced previously.
It also lowered full-year fiscal 2014 earnings per share
guidance to a range of 79-81 cents from 80-90 cents announced
Almost all the estimates were revised downward following the
pessimistic outlook provided by the company. The Zacks Consensus
Estimate for fourth-quarter 2014 slipped 18.3% to 67 cents per
share over the last 30 days. For 2014, the Zacks Consensus
Estimate slipped 15.8% to 80 cents per share over the same
Other Stocks to Consider
Some better-ranked stocks in the consumer staples sector worth
Post Holdings, Inc.
Diamond Foods Inc.
The Hain Celestial Group Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
DIAMOND FOODS (DMND): Free Stock Analysis
HAIN CELESTIAL (HAIN): Free Stock Analysis
KIRKLANDS INC (KIRK): Free Stock Analysis
POST HOLDINGS (POST): Free Stock Analysis
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