) second-quarter 2014 loss of 6 cents per share was wider than the
Zacks Consensus Estimate of a loss of 4 cents as well as the
year-ago loss of 3 cents. The company's loss was within
management's expectation of a loss 6 to 3 cents.
Kirklands, Inc - Earnings Surprise |
Quarter in Detail
Net sales went up 6.6% to $103.5 million in the second quarter
of fiscal 2014 compared with $97.1 million last year backed by
higher comps. Sales missed management's expected range of $104-$106
million marginally due to lower-than-expected sales in June.
Kirkland's reported 3.6% comps gain against a decline of 0.2% in
the prior-year quarter driven by decent gains in transactions and
tickets. E-Commence sales went up 27% year over year. Same-store
sales were also within management's guidance of 3-4% growth
announced during the first-quarter fiscal 2013 earnings conference
Strong comps in Florida and Texas drove sales during the
quarter. Merchandise like fragrance and accessories, textiles, art,
holiday, housewares and wall decor recorded strong sales during the
On a year-over-year basis, gross profit went up 6.3% to $37.87
million, while gross profit margin shrank 10 basis points to 36.6%
from the prior year as the positive effect from higher sales was
offset by higher cost of sales.
During second-quarter fiscal 2014, Kirkland's opened six stores
while closing two, higher than its guidance.
Other Financial Updates
During the second quarter, Kirkland's spent $1.2 million to
repurchase 6.8 million shares.
Kirkland's exited the quarter with cash and cash equivalents of
$68.46 million compared with $82.4 million in the prior quarter.
Deferred rent and other long-term liabilities were $44.9 million
compared with $44.8 million in the last quarter.
Fiscal Third-Quarter 2014 Guidance
Management issued third quarter fiscal outlook and expects
fiscal third-quarter 2014 earnings per share in the range of 2 to 4
cents. Net sales are expected in the range of $113 to $115 million
with 3-4.5% increase in comparable store sales. The company expects
to open approximately 13 stores while closing approximately 2 in
the upcoming quarter.
Fiscal 2014 Guidance
For fiscal 2014, Kirkland's lowered its earnings guidance to a
range of 87 to 97 cents per share from 80 cents to $1.00 per share
range expected previously. Net sales are expected to increase 7% to
8.5%. Kirkland's expects to open 35 stores while closing 15 during
the period. For the fiscal year, Kirkland's expects margins to
improve due to lower markdown rate and lower inbound freight
Kirkland's carries a Zacks Rank #4 (Sell). Better-ranked stocks
in the retail sector include Citi Trends Inc. (
), Foot Locker Inc.
and Buckle Inc.
. While Citi Trends sports a Zacks Rank #1 (Strong Buy), Foot
Locker and Buckle carry a Zacks Rank #2 (Buy).
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