Nov 20, 2014 |
Kirkland's Reports Third Quarter 2014 Results |
Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the
13-week and 39-week periods ended November 1, 2014.
Net sales for the 13 weeks ended November 1, 2014, increased 10.4% to
$117.2 million compared with $106.1 million for the 13 weeks ended
November 2, 2013. Comparable store sales for the 13 weeks ended November
1, 2014, including e-commerce sales, increased 6.3% compared with an
increase of 4.9% in the prior-year quarter. Kirkland's opened 10 stores
and closed one store during the third quarter, bringing the total number
of stores to 337 at quarter end.
Net sales for the 39 weeks ended November 1, 2014, increased 8% to
$328.9 million compared with $304.5 million for the 39 weeks ended
November 2, 2013. Comparable store sales, including e-commerce, for the
39 weeks ended November 1, 2014, increased 5.0% compared with an
increase of 0.8% in the prior-year period.
The Company reported net income of $1.3 million, or $0.07 per diluted
share, for the 13 weeks ended November 1, 2014, compared with net income
of $1.0 million, or $0.06 per diluted share, for the 13 weeks ended
November 2, 2013.
For the 39 weeks ended November 1, 2014, the Company reported net income
of $2.3 million, or $0.13 per diluted share compared with net income of
$2.2 million, or $0.13 per diluted share, for the 39 weeks ended
November 2, 2013.
Robert Alderson, Kirkland's Chief Executive Officer, said, "The
Kirkland's brand continues to resonate with customers looking to fill
their home décor and seasonal needs. Traffic was positive in the
quarter, merchandise margins built on last year's gains and demand was
strong across both our seasonal and core product categories. Overall, we
are encouraged by the progress our team is making to leverage
investments in supply chain, technology, marketing and real estate. We
look forward to executing a strong finish to fiscal 2014."
Stock Repurchase Plan
During the third quarter, the Company repurchased 159,000 shares of
common stock for a total expenditure of $2.7 million, or an average
price of $16.95 per share. As of the end of the third quarter, the
Company had 17.2 million shares outstanding and $26.1 million remaining
under its current share repurchase authorization.
Updated Fiscal 2014 Outlook |
| | Earnings: | |
Based on the Company's strong sales and earnings performance to date
in fiscal 2014, the Company has revised its full year earnings range
to $0.90 to $0.97 per diluted share from its previous range of $0.87
to $0.97. This full year guidance implies an earnings expectation in
the range of $0.77 to $0.84 per diluted share for the 13 weeks
ending January 31, 2015 (the "fourth quarter") based on an effective
tax rate of 39%.
| | |
| Store Growth: | |
For the fourth quarter, the Company expects to open 11 stores and
close four stores. For Fiscal 2014, this represents 34 new store
openings and 14 closings, a square footage increase of 7%.
| | |
| Sales: | |
The Company expects total sales for the fourth quarter to range
between $172 and $175 million. This implies a comparable store sales
increase of 5% to 6%. Total sales for fiscal 2014 are expected to
range between $501 million and $504 million. This level of sales
performance would imply a comparable store sales increase of
approximately 4.5% to 5.5% for fiscal 2014.
| | |
| Margin & Expenses: | |
The fourth quarter earnings forecast implies slight year-over-year
improvement in merchandise and gross profit margins. Operating
expenses are expected to increase on a dollar basis due to the
increase in stores and incremental investments in corporate
headcount to support the Company's growth initiatives. These
operating expenses are expected to be flat to slightly down as a
percentage of sales for the fourth quarter. For the full year, the
Company anticipates operating margin to be slightly up.
| | |
| Cash Flow: | |
Capital expenditures in fiscal 2014 are estimated to range between
$31 million and $33 million. Based on the above assumptions, the
Company expects to generate positive cash flow in fiscal 2014,
excluding potential share repurchases.
|
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call on November 20, 2014, at
11:00 a.m. Eastern time. The number to call for the interactive
teleconference is (212) 231-2918. A replay of the conference call will
be available through Wednesday, November 26, 2014, by dialing (402)
977-9140 and entering the confirmation number, 21706375.
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=100920
on November 20, 2014, beginning at 11:00 a.m. Eastern time. 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 341 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 17, 2014.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 | (In thousands, except per share data) | | | | | | |
| | | | | | |
| | | | 13-Week Period Ended | | | 13-Week Period Ended | | | | November 1, | | | November 2, | | | | 2014 | | | 2013 |
Net sales
| | |
$
|
117,198
| | |
$
|
106,134
|
Cost of sales
| | |
|
71,446
| | |
|
64,999
|
Gross profit
| | | |
45,752
| | | |
41,135
| | | | | | |
|
Operating expenses:
| | | | | | |
Operating expenses
| | | |
39,111
| | | |
35,392
|
Depreciation
| | |
|
4,670
| | |
|
4,049
|
Operating income
| | | |
1,971
| | | |
1,694
| | | | | | |
|
Other expense, net
| | |
|
1
| | |
|
12
|
Income before income taxes
| | | |
1,970
| | | |
1,682
|
Income tax expense
| | |
|
710
| | |
|
674
|
Net income
| | |
$
|
1,260
| | |
$
|
1,008
| | | | | | |
|
Earnings per share:
| | | | | | |
Basic
| | |
$
|
0.07
| | |
$
|
0.06
|
Diluted
| | |
$
|
0.07
| | |
$
|
0.06
| | | | | | |
|
Shares used to calculate earnings per share:
| | | | | | |
Basic
| | |
|
17,258
| | |
|
17,269
|
Diluted
| | |
|
17,734
| | |
|
17,763
|
|
|
| |
|
|
| | | KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME | (In thousands, except per share data) | | | | | | | | |
| | | | | | | | |
| | | | 39-Week Period Ended | | | | 39-Week Period Ended | | | | | November 1, | | | | November 2, | | | | | 2014 | | | | 2013 |
Net sales
| | |
$
|
328,938
| | | | |
$
|
304,490
| |
Cost of sales
| | |
|
202,711
|
| | | |
|
188,306
| |
Gross profit
| | | |
126,227
| | | | | |
116,184
| | | | | | | | | |
|
Operating expenses:
| | | | | | | | |
Operating expenses
| | | |
109,367
| | | | | |
100,938
| |
Depreciation
| | |
|
13,401
|
| | | |
|
11,790
| |
Operating income
| | | |
3,459
| | | | | |
3,456
| | | | | | | | | |
|
Other (income) expense, net
| | |
|
(171
|
)
| | | |
|
37
| |
Income before income taxes
| | | |
3,630
| | | | | |
3,419
| |
Income tax expense
| | |
|
1,370
|
| | | |
|
1,215
| |
Net income
| | |
$
|
2,260
|
| | | |
$
|
2,204
| | | | | | | | | |
|
Earnings per share:
| | | | | | | | |
Basic
| | |
$
|
0.13
|
| | | |
$
|
0.13
| |
Diluted
| | |
$
|
0.13
|
| | | |
$
|
0.13
| | | | | | | | | |
|
Shares used to calculate earnings per share:
| | | | | | | | |
Basic
| | |
|
17,300
|
| | | |
|
17,176
| |
Diluted
| | |
|
17,799
|
| | | |
|
17,611
| |
| |
|
| |
|
| |
|
| | KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS | (In thousands) | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | November 1, | | | February 1, | | | November 2, | | | | | | 2014 | | | 2014 | | | 2013 | ASSETS | | | | | | | | | | | | | | | | | | | | | | |
|
Current assets:
| | | | | | | | | | |
Cash and cash equivalents
| | |
$
|
56,642
| | |
$
|
89,050
| | |
$
|
54,634
|
Inventories, net
| | | | |
77,456
| | | |
52,637
| | | |
68,833
|
Deferred income taxes
| | | |
2,969
| | | |
2,777
| | | |
1,687
|
Other current assets
| | |
|
12,549
| | |
|
8,817
| | |
|
12,480
|
Total current assets
| | | |
149,616
| | | |
153,281
| | | |
137,634
| | | | | | | | | | | |
|
Property and equipment, net
| | | |
90,683
| | | |
80,329
| | | |
79,664
|
Other assets
| | | |
|
2,125
| | |
|
1,838
| | |
|
1,823
| | | | | | | | | | | |
|
Total assets
| | | |
$
|
242,424
| | |
$
|
235,448
| | |
$
|
219,121
| | | | | | | | | | | |
| | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | |
|
Current liabilities:
| | | | | | | | | | |
Accounts payable
| | | |
$
|
32,049
| | |
$
|
23,102
| | |
$
|
24,751
|
Income taxes payable
| | | |
-
| | | |
5,875
| | | |
-
|
Other current liabilities
| | |
|
25,296
| | |
|
23,670
| | |
|
23,886
|
Total current liabilities
| | | |
57,345
| | | |
52,647
| | | |
48,637
| | | | | | | | | | | |
|
Non-current deferred income taxes
| | | |
3,116
| | | |
3,337
| | | |
2,966
|
Deferred rent and other long-term liabilities
| | |
|
46,305
| | |
|
44,235
| | |
|
44,312
|
Total liabilities
| | | |
|
106,766
| | |
|
100,219
| | |
|
95,915
| | | | | | | | | | | |
|
Net shareholders' equity
| | |
|
135,658
| | |
|
135,229
| | |
|
123,206
| | | | | | | | | | | |
|
Total liabilities and shareholders' equity
| | |
$
|
242,424
| | |
$
|
235,448
| | |
$
|
219,121
|
|
|
| |
|
| | KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | (In thousands) |
| | | | | | | | | | | | 39-Week Period Ended | | | 39-Week Period Ended | | | | | November 1, | | | November 2, | | | | |
| 2014 |
| | |
| 2013 |
| Net cash provided by (used in): | | | | | | | | | | | | | |
| |
Operating activities
| | |
$
|
(4,473
|
)
| | |
$
|
(1,114
|
)
| |
Investing activities
| | | |
(24,049
|
)
| | | |
(13,064
|
)
| |
Financing activities
| | |
| (3,886 | ) | | |
| 1,015 |
| | | | | | | |
| Cash and cash equivalents: | | | | | | | |
Net decrease
| | | |
(32,408
|
)
| | | |
(13,163
|
)
| |
Beginning of the period
| | |
| 89,050 |
| | |
| 67,797 |
| |
End of the period
| | | $ | 56,642 |
| | | $ | 54,634 |
|
Kirkland's, Inc. W. Michael Madden, 615-872-4898 President &
COO IR@Kirklands.com or SCR
Partners Jeff Black, 615-760-3679 or Tripp Sullivan,
615-760-1104
|
|