) reported a second quarter fiscal 2012 loss of 11 cents per share,
which was wider than the Zacks Consensus Estimate for a loss of 8
cents. The loss was also wider than the year-ago loss of 2 cents,
due to higher promotional activity and softer than expected
Quarter in Detail
Kirkland's net sales were up 1.5% year over year to $91.0
million from $89.7 million in the year-ago quarter. However, sales
missed the Zacks Consensus Estimate of $94.0 million. Consolidated
comparable store sales declined 3.6% compared with an 8.0% decrease
in the year-ago quarter.
The company opened 10 stores and closed 5 during the quarter,
bringing the total number of stores to 302.
On a year-over-year basis, gross profit came down to $29.9
million from $30.8 million in the year-ago quarter. Gross margin
contracted 140 basis points to 33.0% on the back of higher
promotional activity to combat lower sales. The operating loss
widened to $3.9 million ,against an operating loss of $0.6 million
in the year-ago quarter.
Kirkland's exited the quarter with cash and cash equivalents of
$49.6 million, compared with $75.0 million in the prior-year
quarter. Deferred rent and other long-term liabilities stood at
$40.2 million compared with $32.0 million.
Kirkland's used $2.4 million of cash for operating activities
compared with $5.6 million of cash provided in the year-ago
quarter. It used $14.8 million for investing activities and $16.4
million for financing activities compared with $11.8 million and
$1.3 million, respectively.
During the quarter the company bought back 1.14 million of
shares worth $13.4 million and completed its share repurchase plan,
which began in August 2011. Under this plan, the company bought
back a total of 3.4 million shares worth $40 million.
Based on the second quarter fiscal 2012 results, the company
lowered its guidance for fiscal 2012. Management now expects
earnings per share for fiscal 2012 between 72 cents and 82 cents,
down from the previously announced guidance range of 87 cents to 97
cents. Kirkland's expects to open approximately 40 to 44 new stores
in fiscal 2012 and close 30 stores, representing square footage
growth of 9%.
Kirkland's expects fiscal 2012 total sales growth in the range
of 4% to 6% over fiscal 2011, compared with the previous guidance
of 7% to 9% growth.
For the third quarter of fiscal 2012, the company expects a net
loss in the range of 3 cents to 7 cents per diluted share. Net
sales are expected to be $97 million to $99 million. Kirkland's
expects to open approximately 14 to 16 new stores and close 4
stores during the quarter.
Kirkland's competitors include
The TJX Companies Inc
Ross Stores Inc
). Currently, we have a long-term Underperform recommendation on
Kirkland's, which carries a Zacks #4 Rank (short term 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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