May 18, 2012 |
Kirkland's Reports First Quarter 2012 Results |
Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the
13-week period ended April 28, 2012.
Net sales for the 13 weeks ended April 28, 2012, increased 3.6% to $97.8
million compared with $94.4 million for the prior-year quarter.
Comparable store sales for the first quarter of fiscal 2012 decreased
1.2% compared with a decrease of 8.4% in the prior-year quarter.
Kirkland's opened 5 stores and closed 17 during the first quarter of
2012, bringing the total number of stores to 297 at quarter end.
The Company reported net income of $2.0 million, or $0.10 per diluted
share, for the first quarter of fiscal 2012 compared with net income of
$3.2 million, or $0.15 per diluted share, for the first quarter of
fiscal 2011.
Robert Alderson, Kirkland's President and Chief Executive Officer, said,
"We entered the first quarter with positive momentum and confidence that
the substantial effort to address Spring merchandising and marketing
opportunities would sustain those trends, but we noticed a distinct
change in customer sentiment in the latter half of the quarter that we
addressed with promotional activity. As a result, we experienced weaker
margin and comparable store sales trends that have continued into early
second quarter.
"Our second quarter outlook reflects the current environment in retail,
but does not overshadow the continued investments we are making to
support steady store growth, complete the four-year program to upgrade
our information systems, deliver a consistent store experience and
maintain the growth and momentum in our e-commerce effort. The
opportunity for Kirkland's is to deliver consistent and reasonable sales
and earnings growth, and these investments are bringing us closer to
achieving that goal. We are focusing intently on merchandising
improvement to better leverage our industry leadership in inventory
productivity and a loyal customer base."
Stock Repurchase Plan
During the first quarter of fiscal 2012, the Company repurchased 219,434
shares of common stock for a total of $3.2 million, or an average price
of $14.60 per share. The Company has $13.4 million remaining under its
repurchase authorization.
Updated Fiscal 2012 Performance Goals |
|
|
| | Store Growth: | | | |
For the 53-week period ending February 2, 2013 ("fiscal 2012"), the
Company expects to open 40 to 45 new stores and close approximately
30 stores. This expected unit growth of approximately 3% to 5% would
represent an increase in square footage of approximately 8% to 10%.
New store openings will be weighted more toward the second half of
the year, while closings are weighted more toward the first half.
| | | | |
| Sales: | | | |
The Company expects total sales for fiscal 2012 to increase in the
range of 7% to 9% compared with fiscal 2011. This expectation for
total sales growth reflects the additional week in the retail
calendar for Fiscal 2012. This level of sales growth would imply
comparable store sales of slightly negative to flat for the fiscal
year, excluding the impact of the additional week of sales.
| | | | |
| Margins: | | | |
Based on the current outlook, the Company expects operating margin
in fiscal 2012 to be 90 to 140 basis points below fiscal 2011 due to
higher fuel costs and expected increases in container rates in the
back-half of the year combined with a planned increase in marketing
expenses, as well as investments in additional personnel in key
areas of the business to support the Company's growth plans and
technology investments.
| | | | |
| Earnings: | | | |
Based on the above assumptions, the Company expects earnings per
share for fiscal 2012 to be in the range of $0.87 to $0.97. The
Company expects its effective tax rate for fiscal 2012 to range
between 38% and 38.5%.
| | | | |
| Cash Flow: | | | |
Excluding activity under the Company's share repurchase program, the
Company expects to again generate positive cash flow in fiscal 2012.
Capital expenditures in fiscal 2012 are estimated to range between
$29 million and $32 million.
| | | | |
|
Second Quarter Fiscal 2012 Outlook
For the second quarter ending July 28, 2012, the Company expects a net
loss of $0.07 to $0.11 per diluted share compared with a net loss of
$0.02 per share in the prior year quarter. Net sales are expected to be
$94 million to $96 million, with comparable store sales flat to down 3%.
The Company expects to open approximately 10 to 12 stores and close
approximately 5 stores during the quarter.
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call at 11:00 a.m. ET today to discuss
the first 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, May 25, 2012, by dialing (402) 977-9140 and
entering the confirmation number, 21575898.
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=86292
on May 18, 2012, 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 297 stores in 30 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 12, 2012.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 INCOME | (dollars in thousands, except per share amounts) | |
| |
| | | | | |
| | | 13-Week Period Ended | | | April 28, | | April 30, | | | 2012 | | 2011 | | | | |
|
Net sales
| |
$
|
97,788
| | |
$
|
94,403
|
Cost of sales
| |
|
59,319
|
| |
|
56,315
|
Gross profit
| | |
38,469
| | | |
38,088
| | | | |
|
Operating expenses:
| | | | |
Operating expenses
| | |
32,284
| | | |
29,681
|
Depreciation
| |
|
3,015
|
| |
|
3,241
|
Operating income
| | |
3,170
| | | |
5,166
| | | | |
|
Other (income) expense, net
| |
|
(3
|
)
| |
|
37
|
Income before income taxes
| | |
3,173
| | | |
5,129
|
Income tax expense
| |
|
1,218
|
| |
|
1,959
|
Net income
| |
$
|
1,955
|
| |
$
|
3,170
| | | | |
|
Earnings per share:
| | | | |
Basic
| |
$
|
0.11
|
| |
$
|
0.16
|
Diluted
| |
$
|
0.10
|
| |
$
|
0.15
| | | | |
|
Shares used to calculate earnings per share:
| | | | |
Basic
| |
|
18,269
|
| |
|
19,915
|
Diluted
| |
|
18,772
|
| |
|
20,660
|
|
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS | (dollars in thousands) | |
| |
| |
| | | | | | | |
| | | April 28, | | January 28, | | April 30, | | | 2012 | | 2012 | | 2011 | ASSETS | | | | | | | | | | | | |
|
Current assets:
| | | | | | |
Cash and cash equivalents
| |
$
|
73,162
| |
$
|
83,123
| |
$
|
90,254
|
Inventories, net
| | |
47,484
| | |
47,306
| | |
44,620
|
Deferred income taxes
| | |
1,725
| | |
1,657
| | |
3,571
|
Other current assets
| |
|
8,118
| |
|
7,784
| |
|
6,810
|
Total current assets
| | |
130,489
| | |
139,870
| | |
145,255
| | | | | | |
|
Property and equipment, net
| | |
61,414
| | |
60,315
| | |
46,013
|
Non-current deferred income taxes
| | |
1,150
| | |
1,108
| | |
1,456
|
Other assets
| |
|
1,496
| |
|
1,296
| |
|
879
| | | | | | |
|
Total assets
| |
$
|
194,549
| |
$
|
202,589
| |
$
|
193,603
| | | | | | |
| | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | |
|
Current liabilities:
| | | | | | |
Accounts payable
| |
$
|
18,050
| |
$
|
21,592
| |
$
|
19,824
|
Income taxes payable
| | |
1,931
| | |
3,146
| | |
601
|
Other current liabilities
| |
|
18,637
| |
|
21,805
| |
|
20,287
|
Total current liabilities
| | |
38,618
| | |
46,543
| | |
40,712
| | | | | | |
|
Deferred rent and other long-term liabilities
| |
|
38,633
| |
|
38,384
| |
|
30,615
|
Total liabilities
| |
|
77,251
| |
|
84,927
| |
|
71,327
| | | | | | |
|
Net shareholders' equity
| |
|
117,298
| |
|
117,662
| |
|
122,276
| | | | | | |
|
Total liabilities and shareholders' equity
| |
$
|
194,549
| |
$
|
202,589
| |
$
|
193,603
|
|
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | (dollars in thousands) |
| |
| |
| | | | | 13-Week Period Ended | | | | April 28, | | April 30, | | | | 2012 | | 2011 | Net cash provided by (used in): | | | | | | | | | |
| |
Operating activities
| |
$
|
(2,733
|
)
| |
$
|
2,060
| | |
Investing activities
| | |
(4,109
|
)
| | |
(3,096
|
)
| |
Financing activities
| |
| (3,119 | ) | |
| 68 |
| | | | | |
| Cash and cash equivalents: | | | | | |
Net decrease
| | |
(9,961
|
)
| | |
(968
|
)
| |
Beginning of the period
| |
| 83,123 |
| |
| 91,222 |
| |
End of the period
| | $ | 73,162 |
| | $ | 90,254 |
| | | | | | | | | |
|
Kirkland's, Inc. W. Michael Madden, 615-872-4800 Senior Vice
President & CFO or Corporate Communications, Inc. Tripp
Sullivan, 615-324-7335
|
|