Kirklands Inc (NASDAQ:KIRK)
Kirkland’s Earnings & Technicals
On Tuesday before the market opened, Kirkland’s Inc. (KIRK) announced first quarter earnings that missed analyst expectations and sent shares tumbling in the premarket session. The home decor retailer announced first quarter earnings of 6 cents per share on $129.9 million in revenues while analysts were looking for 9 cents per share on $132 million in revenues. The company also announced that same-store sales edged up 0.5% this quarter while they also closed 8 stores and opened 14 different ones. KIRK reaffirmed its 2016 outlook of 98 cents to $1.11 per share. Currently analysts have an average price target of $22.40.
Shares have been beaten down since gapping down in November on heavy volume and haven’t fared much better in 2016 as shares are down 7.2% on the year. Looking at the chart you will see that shares are trading well below their 200-day moving average currently sitting at $17.96 and have begun a new downtrend after consolidating between the $16 and $17 levels for a couple months. Look for shares to remain under pressure with support coming in at $12.50 and $11.50 while resistance will be met at $13.10 and $14.
CEO Comments
“The first quarter was in line with our expectations as we executed on our strategic priorities in a challenging traffic environment,” said Mike Madden, President and Chief Executive Officer. “E-commerce revenues increased 28%, store conversion was positive, and our seasonal categories performed well. As expected, gross margin was impacted by a planned increase in promotional activity and startup costs for our new e-commerce fulfillment center. Operating expenses were tightly managed during the quarter and will remain a focus throughout the year.”
“Importantly, we believe we’re well-positioned to execute on our plans for 2016,” continued Mr. Madden. “Inventory levels are moderating, and our new e-commerce fulfillment center is now fully operational. The fourteen stores we opened in the first quarter are performing above plan, and we expect to have the entire 2016 class open by the end of the third quarter. These developments are alleviating recent pressure on our supply chain and driving better efficiency across the organization as we prepare for the crucial fall and holiday selling periods.”
KIRK Profile
Kirkland’s, Inc. is a retailer of home decor and gifts in the United States. As of January 31, 2015, the Company operated 344 stores in 35 states, as well as an e-commerce enabled Website. The Company’s stores present a line of merchandise, including framed art, mirrors, wall decor, candles and related items, lamps, decorative accessories, accent furniture, textiles, garden-related accessories and artificial floral products. Its stores also offer an assortment of holiday merchandise during seasonal periods, as well as items carried throughout the year suitable for gift-giving. Its stores operate under the names, such as Kirkland’s, Kirkland’s Home, Kirkland’s Home Outlet, Kirkland’s Outlet and The Kirkland Collection. The Company operates in metropolitan markets, such as Houston, Texas and Atlanta, Georgia; middle markets, such as Nashville, Tennessee, and Kansas City, Missouri, and smaller markets, such as Lafayette, Louisiana, and Amarillo, Texas