NASHVILLE, Tenn., May 31, 2018 /PRNewswire/ -- Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the 13-week period ended May 5, 2018.

Net sales for the 13 weeks ended May 5, 2018 increased 7.2% to $142.5 million compared with $132.8 million for the 13 weeks ended April 29, 2017. Comparable store sales for the first quarter of fiscal 2018, including e-commerce sales, increased 1.4% compared with a decrease of 3.8% in the prior-year quarter. Kirkland's opened 10 stores and closed three during the first quarter, bringing the total number of stores to 425 at quarter-end.

Net loss for the 13 weeks ended May 5, 2018 was $0.9 million, or ($0.06) per diluted share compared with a net loss of $1.4 million, or ($0.09) per diluted share, for the 13 weeks ended April 29, 2017. Adjusted loss, excluding severance and transition charges associated with the resignation of the Company's former Chief Executive Officer, for the 13 weeks ended May 5, 2018 was $72,000, or $0.00 per diluted share.

"We are pleased with our first quarter results," said Mike Cairnes, Acting Chief Executive Officer.  "Kirkland's achieved record sales in the quarter driven by continued momentum in our e-commerce business and gains in both conversion and average ticket in store.  We improved our performance year-over-year as we gained traction in product margin through improved discipline and use of analytics while managing our costs.  In addition, we continue to enhance our customer experience and deliver new and exciting products as we optimize operating efficiency.  I am proud of the way our team is coming together, and I am optimistic about the prospect of improving financial performance and long-term value for shareholders."

Fiscal 2018 Outlook

Kirkland's is reaffirming its fiscal 2018 outlook and all other assumptions provided on March 16, 2018 for diluted earnings per share on a GAAP basis in the range of $0.50 to $0.60, inclusive of CEO transition charges.

This performance outlook is based on current information as of May 31, 2018. The information on which this outlook is based is subject to change, and the Company may update its full year business outlook or any portion thereof at any time for any reason.

Investor Conference Call and Web Simulcast

Kirkland's will hold its earnings call for the first quarter later today at 11:00 a.m. ET. Participating on the call will be Mike Cairnes, Acting Chief Executive Officer, and Nicole Strain, Interim Chief Financial Officer. The number to call for the interactive teleconference is (412) 542-4163. A replay of the conference call will be available through Thursday, June 7, 2018 by dialing (412) 317-0088 and entering the confirmation number 10120525.

A live webcast of Kirkland's quarterly conference call will be available online on the Company's Investor Relations page on May 31, 2018, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for one year.

About Kirkland's, Inc.

Kirkland's, Inc. was founded in 1966 and is a specialty retailer of home décor in the United States. Although originally focused in the Southeast, the Company has grown beyond that region and currently operates 424 stores in 37 states as well as an e-Commerce enabled website, www.kirklands.com.  The Company's stores present a broad selection of distinctive merchandise, including holiday décor, framed art, furniture, ornamental wall décor, fragrance and accessories, mirrors, lamps, decorative accessories, textiles, housewares, gifts, artificial floral products, frames, clocks and outdoor living items.  The Company's stores offer an extensive assortment of holiday merchandise during seasonal periods as well as items carried throughout the year suitable for gift-giving.  More information can be found at www.kirklands.com.

Forward-Looking Statements

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the finalization of the Company's quarterly financial and accounting procedures. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Kirkland's actual results to differ materially from forecasted results. Those risks and uncertainties include, among other things, the competitive environment in the home décor industry in general and in Kirkland's specific market areas, inflation, fluctuations in cost and availability of products, interruptions in supply chain and distribution systems, including our e-commerce systems and channels, the ability to control employment and other operating costs, availability of suitable retail locations and other growth opportunities, disruptions in information technology systems including the potential for security breaches of Kirkland's or its customers' information, seasonal fluctuations in consumer spending, and economic conditions in general. Those and other risks are more fully described in Kirkland's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K filed on April 3, 2018 and subsequent reports. Kirkland's disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

 

KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS
(In thousands, except per share data)






13-Week Period
Ended


13-Week Period
Ended


May 5, 2018


April 29, 2017

Net sales

$                    142,454


$                    132,841

Cost of sales (1)

97,142


89,993

Gross profit

45,312


42,848

Operating expenses:




Compensation and benefits

27,849


26,510

Other operating expenses

17,319


16,995

Depreciation (exclusive of depreciation included in cost of sales) (1)

1,764


1,621

Total operating expenses

46,932


45,126

Operating loss

(1,620)


(2,278)

Other income, net

(266)


(25)

Loss before income taxes

(1,354)


(2,253)

Income tax benefit

(472)


(818)

Net loss

$                         (882)


$                      (1,435)

Loss per share:




Basic

$                        (0.06)


$                        (0.09)

Diluted

$                        (0.06)


$                        (0.09)

Shares used to calculate loss per share:




Basic

15,808


15,913

Diluted

15,808


15,913





(1) During the fourth quarter of 2017, the Company reclassified supply chain and store-related depreciation expense to cost
of sales whereas it was previously included in depreciation on its financial statements. The Company also reclassified prior
period amounts to reflect this change. This reclassification increased cost of sales by approximately $4.8 million for the 13
weeks ended April 29, 2017, with an equal and offsetting decrease to depreciation. This reclassification had no impact on
net sales, operating loss, net loss or loss per share.

 

KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)








May 5,
2018


February 3,
2018


April 29,
2017

ASSETS






Current assets:






Cash and cash equivalents

$            58,242


$            80,156


$            59,804

Inventories, net (1)

83,164


81,255


72,565

Prepaid expenses and other current assets (1)

15,848


15,988


12,893

Total current assets

157,254


177,399


145,262

Property and equipment, net

116,812


113,039


110,869

Deferred income taxes

2,004


2,216


1,144

Other assets

6,531


6,543


5,815

Total assets

$          282,601


$          299,197


$          263,090







LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






Accounts payable

$            43,162


$            53,125


$            29,915

Income taxes payable

4,362


4,943


4,891

Accrued expenses

35,021


38,872


31,633

Total current liabilities

82,545


96,940


66,439

Deferred rent

54,235


53,303


52,956

Deferred income taxes



957

Other liabilities

8,416


8,193


9,475

Total liabilities

145,196


158,436


129,827

Net shareholders' equity

137,405


140,761


133,263

Total liabilities and shareholders' equity

$          282,601


$          299,197


$          263,090







(1)During the fourth quarter of 2017, the Company reclassified supplies inventory to prepaid expenses and other current
assets whereas it was previously included in inventories, net, on its financial statements. The Company also reclassified
prior period amounts to reflect this change. This reclassification increased prepaid expenses and other current assets by
approximately $2.1 million for the 13 weeks ended April 29, 2017, with an equal and offsetting decrease to inventories, net.

 

KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)






13-Week Period
Ended


13-Week Period
Ended


May 5, 2018


April 29, 2017

Net cash (used in) provided by:




Operating activities

$                    (7,964)


$                     1,358

Investing activities

(11,083)


(5,587)

Financing activities

(2,867)


96

Cash and cash equivalents:




Net decrease

(21,914)


(4,133)

Beginning of the period

80,156


63,937

End of the period

$                   58,242


$                   59,804

 

Contact:

Kirkland's

SCR Partners


Nicole Strain

 Jeff Black: (615) 760-3679


(615) 872-4800

Tripp Sullivan: (615) 760-1104



IR@Kirklands.com

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SOURCE Kirkland's, Inc.


Source: Kirkland's, Inc.