Nov 21, 2013 |
Kirkland's Reports Third Quarter 2013 Results |
Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the
13-week and 39-week periods ended November 2, 2013.
Net sales for the 13 weeks ended November 2, 2013, increased 9.8% to
$106.1 million compared with $96.7 million for the 13 weeks ended
October 27, 2012. Comparable store sales, including e-commerce sales,
for the third quarter of fiscal 2013 increased 4.9% compared with a
decrease of 4.7% in the prior-year quarter. Kirkland's opened 9 stores
and closed 3 during the third quarter of fiscal 2013, bringing the total
number of stores to 323 at quarter end.
Net sales for the 39 weeks ended November 2, 2013, increased 6.7% to
$304.5 million compared with $285.5 million for the 39 weeks ended
October 27, 2012. Comparable store sales, including e-commerce, for the
39 weeks ended November 2, 2013, increased 0.8% compared with a decrease
of 3.2% in the prior-year period. The Company opened 16 stores and
closed 16 stores during the 39-week period.
The Company reported net income of $1.0 million, or $0.06 per diluted
share, for the third quarter of fiscal 2013 compared with a net loss of
$0.4 million, or $0.02 per diluted share, for the third quarter of
fiscal 2012.
For the 39-week period ended November 2, 2013, the Company reported net
income of $2.2 million, or $0.13 per diluted share, compared with a net
loss of $0.5 million, or $0.03 per diluted share, for the 39-week period
ended October 27, 2012.
Robert Alderson, Kirkland's President and Chief Executive Officer, said,
"Sales momentum was strong during the quarter as our fall and holiday
seasonal merchandise performed well. We continued to see positive
results from strong product margin, higher conversion and higher average
ticket as our merchandise assortments are resonating well with
customers. Traffic improved sequentially during the quarter, and early
fourth quarter trends are similar. Our outlook for the fourth quarter
remains upbeat, and we are optimistic about the further rollout of our
branding initiatives as well as the introduction of our loyalty program,
K Club.
"Our plan for fiscal 2014 is to continue to build on our momentum with
growth in sales, margin improvement, the execution of our multi-channel
strategies and further investments in branding and e-commerce. We also
believe that fiscal 2014 is an opportune time to begin a more aggressive
approach to store growth. We currently anticipate that our square
footage growth will be at least 10% in the coming year. This early
outlook reflects the intense foundational work we've done over the last
three years, which has us well-positioned to grow the business."
Updated Fiscal 2013 Outlook Earnings: |
|
Based on the Company's strong sales and earnings performance to date
in fiscal 2013, the Company has increased its full year earnings
range to $0.90 to 0.95 per diluted share from its previous range of
$0.80 to $0.90 per diluted share. This full year guidance implies an
earnings expectation of a range of $0.77 to $0.82 per diluted share
for the 13 weeks ending February 1, 2014 (the "fourth quarter")
based on an effective tax rate in the range of 38% to 38.5%.
| | | | |
| Store Growth: | |
For the fourth quarter, the Company expects to open 8 stores and
close 7 stores. For fiscal 2013, this represents 24 new store
openings and 23 closings, a square footage increase of 3%.
| | | | |
| Sales: | |
The Company expects total sales for the fourth quarter to range
between $159 and $162 million. This implies a comparable store sales
increase of 2 to 4%, when using a 13-week to 13-week comparison.
Total sales for fiscal 2013 are expected to be in the range of $464
and $467 million, implying a comparable store sales increase of 1 to
2% on a 52-week to 52-week comparative basis.
| | | | |
| Margin & Expenses: | |
The fourth quarter earnings forecast implies year-over-year
improvement in merchandise and gross profit margins that is expected
to result from a lower markdown rate, lower inbound freight costs,
and sales leverage. Operating expenses are expected to increase on a
dollar basis despite the extra week last year due to continued
investment in branding initiatives, higher incentive pay accruals,
and the prior year insurance adjustment referenced below.
| | | | |
| Cash Flow: | |
Capital expenditures in fiscal 2013 are estimated to range between
$18 and $19 million. Based on the above assumptions, the Company
expects to have approximately $86 to $89 million in cash and cash
equivalents at year-end fiscal 2013.
| | | | |
| Q4 Comparisons: | |
Due to the shift in the retail calendar, the fourth quarter of
fiscal 2013 represents the 13 weeks ending February 1, 2014, while
the fourth quarter of fiscal 2012 represents the 14 weeks ended
February 2, 2013. The additional week in the prior year quarter
accounted for approximately $7.5 million in sales and an estimated
earnings per share of approximately $0.02. Additionally, for
comparative purposes, it should be noted that in the prior-year
quarter, the Company recorded a $0.03 benefit resulting from a
positive change in the actuarial estimates of its general liability
and workers' compensation self-insurance reser
|
ves.
| | | |
|
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call at 11:00 a.m. ET today to discuss
the third quarter results. The number to call for the interactive
teleconference is (212) 231-2919. A replay of the conference call will
be available through Friday, November 29, 2013, by dialing (402)
977-9140 and entering the confirmation number, 21646339.
A live broadcast of Kirkland's quarterly conference call will be
available online at the Company's website www.kirklands.com
under Investor Relations or http://www.videonewswire.com/event.asp?id=96772
on November 21, 2013, beginning at 11 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 324 stores in 35 states. The Company's stores present a broad
selection of distinctive merchandise, including framed art, mirrors,
candles, lamps, picture frames, accent rugs, garden accessories and
artificial floral products. The Company's stores also offer an extensive
assortment of gifts, as well as seasonal merchandise. 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.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, product
availability and growth opportunities, seasonal fluctuations, 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 18, 2013.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 | | | November 2, | | October 27, | | | 2013 | | 2012 | | | | |
|
Net sales
| |
$
|
106,134
| | |
$
|
96,688
| |
Cost of sales
| |
|
64,999
|
| |
|
62,669
|
|
Gross profit
| | |
41,135
| | | |
34,019
| | | | | |
|
Operating expenses:
| | | | |
Operating expenses
| | |
35,392
| | | |
31,643
| |
Depreciation
| |
|
4,049
|
| |
|
3,122
|
|
Operating income (loss)
| | |
1,694
| | | |
(746
|
)
| | | | |
|
Other expense, net
| |
|
12
|
| |
|
19
|
|
Income (loss) before income taxes
| | |
1,682
| | | |
(765
|
)
|
Income tax expense (benefit)
| |
|
674
|
| |
|
(349
|
)
|
Net income (loss)
| |
$
|
1,008
|
| |
$
|
(416
|
)
| | | | |
|
Earnings (loss) per share:
| | | | |
Basic
| |
$
|
0.06
|
| |
$
|
(0.02
|
)
|
Diluted
| |
$
|
0.06
|
| |
$
|
(0.02
|
)
| | | | |
|
Shares used to calculate earnings (loss) per share:
| | | | |
Basic
| |
|
17,267
|
| |
|
17,067
|
|
Diluted
| |
|
17,762
|
| |
|
17,067
|
| | | | | | | |
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | (In thousands, except per share data) | |
| |
| | | | | |
| | | 39-Week Period Ended | | | November 2, | | October 27, | | | 2013 | | 2012 | | | | |
|
Net sales
| |
$
|
304,490
| | |
$
|
285,480
| |
Cost of sales
| |
|
188,306
|
| |
|
182,998
|
|
Gross profit
| | |
116,184
| | | |
102,482
| | | | | |
|
Operating expenses:
| | | | |
Operating expenses
| | |
100,938
| | | |
94,668
| |
Depreciation
| |
|
11,790
|
| |
|
9,342
|
|
Operating income (loss)
| | |
3,456
| | | |
(1,528
|
)
| | | | |
|
Other expense, net
| |
|
37
|
| |
|
38
|
|
Income (loss) before income taxes
| | |
3,419
| | | |
(1,566
|
)
|
Income tax expense (benefit)
| |
|
1,215
|
| |
|
(1,108
|
)
|
Net income (loss)
| |
$
|
2,204
|
| |
$
|
(458
|
)
| | | | |
|
Earnings (loss) per share:
| | | | |
Basic
| |
$
|
0.13
|
| |
$
|
(0.03
|
)
|
Diluted
| |
$
|
0.13
|
| |
$
|
(0.03
|
)
| | | | |
|
Shares used to calculate earnings (loss) per share:
| | | | |
Basic
| |
|
17,175
|
| |
|
17,602
|
|
Diluted
| |
|
17,610
|
| |
|
17,602
|
| | | | | | | | |
|
|
| KIRKLAND'S, INC. | | UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS | | (In thousands) | | |
| |
| |
| | | | | | | | | |
| | | November 2, | | February 2, | | October 27, | | | | 2013 | | 2013 | | 2012 | | ASSETS | | | | | | | | | | | | | | |
|
Current assets:
| | | | | | | |
Cash and cash equivalents
| |
$
|
54,634
| |
$
|
67,797
| |
$
|
34,339
| |
Inventories, net
| | |
68,833
| | |
49,577
| | |
64,191
| |
Income taxes receivable
| | |
4,491
| | |
-
| | |
4,479
| |
Deferred income taxes
| | |
1,687
| | |
1,602
| | |
1,497
| |
Other current assets
| |
|
7,989
| |
|
9,370
| |
|
9,917
| |
Total current assets
| | |
137,634
| | |
128,346
| | |
114,423
| | | | | | | | |
|
Property and equipment, net
| | |
79,664
| | |
78,499
| | |
76,004
| |
Non-current deferred income taxes
| | |
-
| | |
-
| | |
803
| |
Other assets
| |
|
1,823
| |
|
1,559
| |
|
1,457
| | | | | | | | |
|
Total assets
| |
$
|
219,121
| |
$
|
208,404
| |
$
|
192,687
| | | | | | | | |
| | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
|
Current liabilities:
| | | | | | | |
Accounts payable
| |
$
|
24,751
| |
$
|
21,642
| |
$
|
27,793
| |
Income taxes payable
| | |
-
| | |
520
| | |
-
| |
Other current liabilities
| |
|
23,886
| |
|
21,009
| |
|
19,874
| |
Total current liabilities
| | |
48,637
| | |
43,171
| | |
47,667
| | | | | | | | |
|
Non-current deferred income taxes
| | |
2,966
| | |
3,128
| | |
-
| |
Deferred rent and other long-term liabilities
| |
|
44,312
| |
|
44,230
| |
|
42,083
| |
Total liabilities
| |
|
95,915
| |
|
90,529
| |
|
89,750
| | | | | | | | |
|
Net shareholders' equity
| |
|
123,206
| |
|
117,875
| |
|
102,937
| | | | | | | | |
|
Total liabilities and shareholders' equity
| |
$
|
219,121
| |
$
|
208,404
| |
$
|
192,687
| | | | | | | | |
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | (In thousands) | |
| |
| | | | 39-Week Period Ended | | | November 2, | | October 27, | | | 2013 | | 2012 | Net cash provided by (used in): | | | | | | | | |
|
Operating activities
| |
$
|
(1,114
|
)
| |
$
|
(7,430
|
)
|
Investing activities
| | |
(13,064
|
)
| | |
(24,996
|
)
|
Financing activities
| |
| 1,015 |
| |
| (16,358 | ) | | | | |
| Cash and cash equivalents: | | | | |
Net decrease
| | |
(13,163
|
)
| | |
(48,784
|
)
|
Beginning of the period
| |
| 67,797 |
| |
| 83,123 |
|
End of the period
| | $ | 54,634 |
| | $ | 34,339 |
| | | | | | | | |
|
Kirkland's, Inc. W. Michael Madden, 615-872-4800 Senior Vice
President & CFO or Corporate Communications, Inc. Tripp
Sullivan, 615-324-7335
|
|