Announces Changes to the Board of DirectorsNASHVILLE, Tenn., June 17, 2025 /PRNewswire/ -- Kirkland's, Inc. (Nasdaq: KIRK) (the "Company") today announced plans to rebrand and change its corporate name from Kirkland's Inc. to The Brand House Collective, Inc. ("The Brand House Collective") reflecting the Company's transformation into a multi-brand merchandising, supply chain and retail operator leading the brick & mortar vision and strategy for Kirkland's Home along with Beyond, Inc.'s ("Beyond") growing por ...

Core Viewpoint - Kirkland's, Inc. will release its financial results for the first quarter of 2025 on June 17, 2025, before market open, followed by a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The financial results for the first quarter of 2025 will be announced before market open on June 17, 2025 [1]. - A conference call is scheduled for 9:00 a.m. Eastern Time on the same day to discuss the financial results [1]. Group 2: Conference Call Details - The toll-free dial-in number for the conference call is 1-855-560-2577, and the international dial-in number is 1-412-542-4163 [2]. - Participants are advised to call 10-15 minutes prior to the start time for registration [2]. - A live audio webcast will be available online at the company's investor relations website [2]. Group 3: Replay Information - A recorded replay of the conference call will be available shortly after its conclusion, accessible online or via telephone [3]. - The telephone replay will be available through June 24, 2025, and the online replay will be available for one year [3]. Group 4: Company Overview - Kirkland's, Inc. is a specialty retailer of home décor and furnishings in the United States, operating 313 stores across 35 states and an e-commerce website [4]. - The company aims to provide an engaging shopping experience with a curated selection of affordable home décor and furnishings [4].

Store Operations - As of February 1, 2025, the company operated a total of 317 stores across 35 states and an e-commerce website[15]. - The company plans to close approximately 15 to 20 underperforming Kirkland's Home locations in fiscal 2025 while opening new locations under the Beyond partnership[21][33]. - The company closed 15 stores in fiscal 2024, resulting in a total of 317 stores as of February 1, 2025, down from 330 stores the previous year[205]. Financial Performance - Net sales for fiscal 2024 decreased by 5.8% to $441.4 million from $468.7 million in fiscal 2023, primarily due to a non-comparable sales decrease of $18.1 million and a consolidated comparable sales decrease of $9.2 million[198]. - The net loss for fiscal 2024 was $23.1 million, or $1.77 per diluted share, compared to a net loss of $27.8 million, or $2.16 per diluted share, in fiscal 2023[198]. - The operating loss for fiscal 2024 was $14.0 million, an improvement of $10.4 million compared to an operating loss of $24.4 million in fiscal 2023[198]. - Cash and cash equivalents were $3.8 million at the end of fiscal 2024, with $43.0 million of outstanding debt under a $90.0 million revolving credit facility[199][206]. - Operating expenses as a percentage of net sales decreased from 13.4% in fiscal 2023 to 12.4% in fiscal 2024, reflecting a focus on cost management[210]. Strategic Partnerships - The company entered into a strategic partnership with Beyond, Inc., involving a $17 million term loan and an $8 million subscription agreement, aimed at driving sustainable growth[16]. - A strategic partnership with Beyond was established, involving a $17 million credit agreement to repay existing loans and reduce borrowings[193]. Merchandise and Sourcing - Direct sourcing accounted for approximately 49% of merchandise purchases in fiscal 2024, with 71% of merchandise receipts originating from China[29]. - Approximately 51% of the merchandise was purchased through vendors in the United States, while about 49% was directly sourced from foreign factories in fiscal 2024[120]. - The company’s merchandise categories for fiscal 2024 included holiday décor (22%), furniture (14%), and gift items (3%), with the latter showing a significant increase from 1% in fiscal 2023[27]. Marketing and Customer Engagement - The company’s marketing strategy focuses on customer retention and acquisition through digital marketing and a loyalty program, K-club, which rewards customers for shopping[42][44]. - The loyalty program's success is uncertain; if customer response is poor, financial results may be negatively impacted[98]. - The company’s marketing and promotional efforts are critical for attracting customers; ineffective execution could adversely impact revenue[96]. Operational Efficiency - The company’s operational efficiency strategy includes maintaining supply chain efficiency and cost containment to return to profitability[22]. - The company aims to enhance its omni-channel experience by reallocating lower-priced inventory to brick-and-mortar stores to maximize Buy Online Pick-up In Store (BOPIS) capabilities[21]. - The company is focused on eliminating underperforming SKUs to enhance margins and is strategically expanding product categories to drive average order value[47]. Risks and Challenges - There is substantial doubt about the company's ability to continue as a going concern, as indicated by the independent auditor's report for the fiscal year ended February 1, 2025[78]. - The company faces restrictions on incurring additional debt due to covenants in its revolving credit facility, which could adversely affect liquidity and operational flexibility[79]. - The company is subject to risks from changes in import duties, quotas, and trade restrictions, which could lead to a decline in inventory and net sales[120]. - The company faces significant competition from larger retailers with greater financial resources, which could adversely affect market share and pricing[101]. - The company may face challenges in maintaining profitable operations in existing stores, which could lead to decreased net sales and profitability[90]. Employee Relations - The company maintains a positive relationship with employees and emphasizes a culture of respect and engagement[54]. - The company is committed to providing competitive pay and benefits, including a 401(k) plan with a 100% match up to 4% of eligible compensation[58]. - The company actively seeks to attract and retain quality employees, utilizing a structured training program for store staff[57]. Economic and Market Conditions - Economic conditions significantly affect discretionary consumer spending, with factors such as national downturns and increased consumer debt potentially reducing sales[158]. - The specialty retail industry is cyclical, and a weak retail environment could adversely affect customer traffic and net sales, particularly during economic downturns[159]. - The retail market for home furnishings is highly competitive, with major competitors including HomeGoods, Walmart, and Amazon[51]. E-commerce and Technology - E-commerce sales accounted for 23.5% of net sales in fiscal 2024, down from 25.8% in fiscal 2023, with comparable e-commerce sales decreasing by 12.9%[197][207]. - The e-commerce channel is integral to the customer journey, with plans to enhance site experience and improve conversion through collaboration with Beyond[48]. - The company faces cybersecurity risks due to the expansion of its e-commerce business, which could lead to operational disruptions and reputational damage[137]. Inventory Management - Inventory management is critical, as failure to accurately predict customer trends may lead to excess inventory and unanticipated markdowns, adversely impacting financial results[169]. - The company experiences substantial seasonal fluctuations in net sales, with the last quarter historically contributing a disproportionate amount to net sales and cash flow[63]. - Severe weather conditions could adversely affect consumer shopping patterns, impacting sales and profitability[155].

Financial Data and Key Metrics Changes - For the fourth quarter, net sales declined to $148.9 million from $165.9 million in the prior year quarter, primarily due to an extra week in the previous year and a decline in store count by approximately 4% [12][13] - Adjusted EBITDA improved by $6 million year over year, reflecting a strong focus on operational efficiency [4][11] - Net income for the quarter was $7.9 million compared to $10.1 million in the prior year quarter, with adjusted earnings per diluted share at $0.54 compared to $0.82 [17] Business Line Data and Key Metrics Changes - Comparable store sales decreased by 0.6%, with a 1.6% increase in comparable store sales offset by a 7.9% decline in e-commerce sales [13] - The company saw increases in holiday, fragrance, gift, and textiles categories, but these were not enough to offset declines in higher ticket categories such as furniture and decor [14] Market Data and Key Metrics Changes - Sales performance was relatively consistent across the country, with slightly better results in Texas and the South, while the Midwest and West showed weaker results [15] - The gross profit margin decreased by 180 basis points to 30.3% of sales, primarily due to increased promotional activity during the holiday period [15] Company Strategy and Development Direction - The company is focusing on a capital-light store conversion strategy leveraging Bed Bath and Beyond Home and Overstock brands to maximize existing inventory and enhance store productivity [5][6] - A strategic partnership with Beyond is expected to drive growth and improve the balance sheet, with plans for aggressive store conversions and a multibrand national real estate strategy [4][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the current consumer and operating environment but remains optimistic about long-term opportunities, particularly through the partnership with Beyond [23][24] - The company is actively working to mitigate tariff impacts by diversifying sourcing and negotiating costs with vendors [10][22] Other Important Information - The company ended the quarter with $81.9 million in inventory, a 10.5% increase from the previous year, reflecting higher freight costs and planned receipt flow [18] - Total debt outstanding was $58.5 million, with a significant paydown of $21.9 million compared to the end of the third quarter [18][19] Q&A Session Summary Question: Can you clarify the fundamental sales trends and same store sales performance? - Management indicated that same store sales were roughly flat for the brick and mortar channel in March and April, with some weakness later in the period [28] Question: How is the e-commerce business performing? - E-commerce remains a headwind, continuing the trend seen in the previous year [29] Question: What is the company's strategy regarding tariffs and sourcing? - The company is holding goods from China and diversifying sourcing to countries with less significant tariff impacts, while also engaging with domestic partners for available inventory [32][33] Question: What is the timeline for the conversion of stores to Bed Bath and Beyond Home and Overstock? - The Nashville location for Bed Bath and Beyond Home is already in the process of conversion, with expectations for a capital-light approach [46]

Financial Data and Key Metrics Changes - For Q4 2024, net sales decreased to $148.9 million from $165.9 million in the prior year, primarily due to an extra week in the previous year and a decline in store count by approximately 4% [13] - Adjusted EBITDA improved by $6 million year over year, reflecting the company's transformation efforts [5] - Net income for the quarter was $7.9 million, down from $10.1 million in the prior year, with adjusted earnings per diluted share at $0.54 compared to $0.82 [18] Business Line Data and Key Metrics Changes - Comparable store sales decreased by 0.6% on a thirteen-week shifted basis, with a 1.6% increase in comparable store sales offset by a 7.9% decline in e-commerce sales [13] - Merchandise categories such as holiday, fragrance, gift, and textiles saw increases, while higher ticket categories like furniture and decor experienced declines [15] Market Data and Key Metrics Changes - Sales performance was consistent across the U.S., with slightly better results in Texas and the South, while the Midwest and West showed weaker performance [16] - The gross profit margin decreased by 180 basis points to 30.3% due to increased promotional activity during the holiday period [16] Company Strategy and Development Direction - The company is focusing on transforming its brand through customer re-engagement, product assortment refocusing, and strengthening omnichannel capabilities [4] - A strategic partnership with Beyond is expected to enhance growth opportunities and improve the balance sheet [5] - The company plans to implement a capital-light store conversion strategy leveraging the Bed Bath and Beyond brand [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the current consumer and operating environment but remains optimistic about long-term growth opportunities [24] - The company is navigating tariff impacts by reducing sourcing exposure to China and exploring alternative sourcing strategies [10][11] Other Important Information - The company ended the quarter with $81.9 million in inventory, a 10.5% increase from the previous year, primarily due to higher freight costs [19] - Total debt decreased to $58.5 million, reflecting a paydown of the revolving line of credit [19] Q&A Session Summary Question: Can you clarify the sales trends in February and the performance in March and April? - Management indicated that February was soft due to weather and consumer sentiment, with flat same-store sales for brick-and-mortar in March and April, but noted some weakness later in that period [28][29] Question: How is the e-commerce business performing in Q1? - E-commerce continues to be a headwind, with performance tracking similarly to the previous year [30][31] Question: What is the company's strategy regarding tariffs and inventory sourcing? - The company is holding goods from China and diversifying sourcing to countries with less tariff impact, while also engaging with domestic partners for available inventory [34][35] Question: What is the timeline for the Bed Bath and Beyond home store conversions? - The Nashville location is set for a capital-light conversion soon, with plans to modify the floor plan and categories [48]

Financial Performance - Net sales for Q4 2024 were $148.9 million, a decrease from $165.9 million in the prior year quarter, primarily due to an extra week in the previous fiscal calendar and a 4% decline in store count[5]. - Comparable sales decreased by 0.6% in Q4 2024, with a 1.6% increase in comparable store sales and a 7.9% decline in e-commerce sales[7]. - Gross profit margin for Q4 2024 was 30.3%, down from 32.0% in the prior year quarter, attributed to lower merchandise margins and higher promotional activity[6]. - Operating income for Q4 2024 was $9.2 million, compared to $10.7 million in the prior year quarter[9]. - Fiscal Year 2024 net sales were $441.4 million, down from $468.7 million in the prior year, with comparable sales decreasing by 2.0%[13]. - Gross profit for FY 2024 was $122.0 million, or 27.6% of net sales, compared to $127.0 million or 27.1% in FY 2023[14]. - Operating loss for FY 2024 was $14.0 million, an improvement from a loss of $24.4 million in FY 2023[16]. - Net sales for the 13-week period ended February 1, 2025, were $148.9 million, a decrease of 10.3% compared to $165.9 million for the 14-week period ended February 3, 2024[31]. - Gross profit for the 52-week period ended February 1, 2025, was $122.0 million, down from $127.0 million for the 53-week period ended February 3, 2024, reflecting a gross margin of 27.7%[32]. - Operating loss for the 52-week period ended February 1, 2025, was $14.0 million, an improvement from a loss of $24.4 million in the previous year[32]. - Net loss for the 52-week period ended February 1, 2025, was $23.1 million, compared to a net loss of $27.8 million for the 53-week period ended February 3, 2024[32]. Cash and Debt Management - As of February 1, 2025, inventory was $81.9 million, a 10.5% increase compared to the prior year[18]. - The company had a cash balance of $3.8 million and $43.0 million of outstanding debt under its revolving credit facility as of February 1, 2025[19]. - The company is in discussions for an additional $5.0 million from Beyond for working capital purposes, including store conversions[21]. - Total current liabilities increased to $152.7 million as of February 1, 2025, compared to $109.2 million as of February 3, 2024[34]. - Cash and cash equivalents remained stable at $3.8 million as of February 1, 2025, compared to $3.8 million as of February 3, 2024[34]. - The company reported a net cash used in operating activities of $19.3 million for the 52-week period ended February 1, 2025, compared to $14.5 million for the previous year[35]. - The company recorded a total of $17.0 million in proceeds from the Beyond transaction, contributing to its financing activities[35]. Earnings and Adjustments - For the 13-week period ended February 1, 2025, the net income was $7,882,000, a decrease from $10,117,000 in the 14-week period ended February 3, 2024[40]. - Adjusted EBITDA for the 13-week period ended February 1, 2025, was $11,986,000, compared to $14,185,000 for the 14-week period ended February 3, 2024, reflecting a decline of approximately 15%[40]. - The operating income for the 13-week period ended February 1, 2025, was $9,190,000, down from $10,665,000 in the previous year, indicating a decrease of about 14%[41]. - Total adjustments to net income for the 52-week period ended February 1, 2025, amounted to $5,362,000, significantly impacting the adjusted net income which was $(17,772,000)[41]. - The diluted earnings per share for the 13-week period ended February 1, 2025, was $0.51, compared to $0.78 for the 14-week period ended February 3, 2024, representing a decline of approximately 35%[41]. - The company reported a total of 15,784,000 diluted weighted average shares outstanding for the 13-week period ended February 1, 2025, an increase from 13,025,000 shares in the previous year[41]. - Adjusted operating income for the 13-week period ended February 1, 2025, was $9,717,000, down from $11,323,000 in the prior year, reflecting a decrease of about 14%[41]. - The company incurred severance charges of $58,000 for the 13-week period ended February 1, 2025, compared to $38,000 in the previous year[41]. - Asset impairment charges for the 52-week period ended February 1, 2025, totaled $109,000, down from $1,867,000 in the previous year[42]. - Stock-based compensation expense for the 13-week period ended February 1, 2025, was $233,000, compared to $295,000 for the 14-week period ended February 3, 2024[41]. Risks and Challenges - The company continues to face risks related to inflation, supply chain disruptions, and competitive pressures in the home décor industry, which may impact future performance[30].

Financial Performance - For Q4 fiscal 2024, the company expects net sales of approximately $148 million, with comparable brick-and-mortar store sales growth of 1.6% and a consolidated comparable sales decline of approximately 0.6%[5] - The company anticipates net income of approximately $7.9 million and diluted earnings per share of approximately $0.50, based on a total share count of approximately 15.8 million shares[5] - The company reported adjusted EBITDA of approximately $12.0 million for Q4 fiscal 2024, reflecting ongoing efforts to improve operational performance[5] E-commerce Strategy - E-commerce sales declined by 7.9% compared to Q4 fiscal 2023, indicating a need for optimization in this channel[5] - The company aims to enhance e-commerce performance by eliminating non-profitable SKUs and reallocating inventory to maximize Buy Online Pick-up In Store (BOPIS) capabilities[4] - The company is exploring opportunities to expand e-commerce distribution in furniture, patio, and rugs to drive average order value[4] Store Performance and Optimization - The company has identified approximately 6% of its stores as underperforming and is taking actions such as converting or closing these locations to improve profitability[4] Capital Management - As of February 17, 2025, the company had $41.9 million in outstanding borrowings and letters of credit under its revolving credit facility[5] - The company is committed to a disciplined approach to capital allocation to maximize liquidity and support its path to profitability[3] Brand Strategy - Kirkland's Home brand will be leveraged as the exclusive private label assortment in Bed Bath & Beyond stores, expanding its reach to new customers[4]

Core Insights - Kirkland's, Inc. reported preliminary fourth quarter fiscal 2024 net sales of approximately $148 million, with comparable brick-and-mortar store sales growth of 1.6% and a consolidated comparable sales decline of approximately 0.6% [6][2] - The company aims to enhance profitability through strategic initiatives, including optimizing e-commerce performance and maximizing brand value [2][5] Financial Performance - For Q4 fiscal 2024, Kirkland's expects net income of approximately $7.9 million and diluted earnings per share of approximately $0.50, with adjusted EBITDA of approximately $12.0 million [6][15] - The company had $41.9 million in outstanding borrowings and letters of credit, with $8.2 million available after the minimum required availability covenant [6] Strategic Initiatives - The company is focused on three strategic initiatives: improving or eliminating underperforming assets, optimizing e-commerce performance, and maximizing the Kirkland's Home brand value and distribution [5][2] - Approximately 6% of stores have been identified as underperforming, with actions being taken to convert or close these locations [5] E-Commerce Strategy - Kirkland's plans to enhance its e-commerce performance by leveraging partnerships and improving site experience, while also reallocating inventory to maximize Buy Online Pick-up In Store (BOPIS) capabilities [5][6] - The company aims to eliminate SKUs that do not meet margin standards and expand product categories to drive average order value [5] Brand Expansion - There is a significant opportunity to expand the Kirkland's Home brand through private label distribution across its family of brands, including Bed Bath & Beyond and Overstock [5][2] - The company intends to leverage commitments from vendor partners to enhance product development and sourcing capabilities [5]

Core Insights - Kirkland's shareholders approved the issuance of common stock related to a transaction with Beyond, Inc., with 97% of votes in favor [1] - Beyond has invested a total of $25 million in Kirkland's, acquiring approximately 40% of its outstanding shares [1] - The transaction is seen as a pivotal moment for Kirkland's, aimed at revitalizing the brand and enhancing growth opportunities [2] Financial Details - Beyond completed an $8 million equity purchase and converted an $8.5 million convertible term loan [1] - The total capital provided by Beyond to Kirkland's amounts to $25 million [1] Strategic Initiatives - Kirkland's is focusing on reengaging its core customers, refocusing product assortment, and strengthening omni-channel capabilities [2] - Plans are in place for the opening of the first Bed Bath & Beyond store later in the year [2] - The partnership aims to leverage strengths in merchandising, store operations, and supply chain to build a cohesive omni-channel strategy [2] Company Overview - Kirkland's operates 317 stores across 35 states and has an e-commerce platform [3] - The company offers a curated selection of home décor and furnishings, emphasizing quality and value [3]

Core Viewpoint - Kirkland's, Inc. has received approximately 94.3% of votes in favor of a proposal to issue shares to Beyond, Inc. as part of a strategic partnership, although the total proxies received represent only 37.2% of total shares outstanding, necessitating an extension of the voting deadline to meet quorum requirements [3][4]. Company Overview - Kirkland's, Inc. is a specialty retailer of home décor and furnishings in the United States, operating 326 stores across 35 states and an e-commerce platform [5]. Voting and Shareholder Engagement - The special meeting for shareholders was originally scheduled for December 23, 2024, but has been adjourned to allow more time for shareholders to participate and meet quorum requirements [2][4]. - The preliminary voting results indicate strong support from shareholders for the strategic partnership with Beyond, Inc., which aims to enhance the Bed Bath and Beyond brand and accelerate growth [3][4]. Strategic Partnership - The partnership with Beyond, Inc. is viewed as a key milestone for Kirkland's, aimed at strengthening its financial position and revitalizing the Bed Bath and Beyond brand [4]. - Both companies express confidence in the management teams and the potential for growth through an omni-channel offering for customers [4].