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Kirkland's Inc. Accelerates New Era with Strategic Leadership Appointments to Advance Transformation as The Brand House Collective
Prnewswire· 2025-07-01 11:00
Leadership Changes - Andrea Courtois has been appointed as Chief Financial Officer, effective July 21, 2025, succeeding Mike Madden, who will remain in an advisory role until August 15, 2025 [1][5] - Michael Sheridan has joined as SVP, General Counsel & Corporate Secretary, overseeing legal affairs and corporate governance [5] - Mandy Gauldin has been promoted to VP, Talent & Culture, focusing on enhancing company culture and performance [5] Strategic Transformation - Kirkland's is undergoing a strategic shift to become The Brand House Collective, a multi-brand merchandising and retail operator [1][2] - The leadership changes are part of a broader effort to build a disciplined, performance-led operating model aimed at profitable scaling [2] - The company aims to elevate talent and drive meaningful outcomes through a mix of fresh perspectives and deep expertise [2] Company Overview - Kirkland's, Inc. is a specialty retailer of home décor and furnishings, operating 312 stores across 35 states and an e-commerce platform [3] - The company offers a curated selection of affordable home décor and furnishings, providing a unique shopping experience [3]
Kirkland's(KIRK) - 2026 Q1 - Quarterly Report
2025-06-17 20:37
PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the 13-week period ended May 3, 2025, reflect a challenging quarter with increased net loss and sales decline, while significant equity transactions improved the shareholders' deficit, though substantial doubt about going concern remains [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of May 3, 2025, total assets decreased to **$225.4 million**, total liabilities decreased to **$241.6 million** due to debt reclassification and conversion, and the shareholders' deficit improved to **$16.2 million** from the prior fiscal year-end Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | February 1, 2025 | May 4, 2024 | | :--- | :--- | :--- | :--- | | **Total current assets** | $85,191 | $91,304 | $86,165 | | **Total assets** | $225,409 | $242,188 | $242,583 | | **Total current liabilities** | $99,348 | $152,672 | $101,573 | | **Total liabilities** | $241,627 | $261,205 | $248,048 | | **Total shareholders' deficit** | $(16,218) | $(19,017) | $(5,465) | - Debt was reclassified from current to long-term as of May 3, 2025, after the company received waivers for covenant violations that occurred on May 2, 2025[24](index=24&type=chunk)[60](index=60&type=chunk) - As of February 1, 2025, most of the company's debt was recorded as current[24](index=24&type=chunk)[60](index=60&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the 13-week period ended May 3, 2025, the company reported an **$11.8 million net loss** on **$81.5 million net sales**, with gross profit margin decreasing to **24.9%** and operating loss widening to **$10.5 million** Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 (13 wks ended May 3) | Q1 2024 (13 wks ended May 4) | | :--- | :--- | :--- | | Net sales | $81,504 | $91,753 | | Gross profit | $20,284 | $27,068 | | Operating loss | $(10,516) | $(7,508) | | Net loss | $(11,824) | $(8,830) | | Diluted loss per share | $(0.54) | $(0.68) | [Condensed Consolidated Statements of Shareholders' (Deficit) Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20(Deficit)%20Equity) The shareholders' deficit improved to **$16.2 million** by May 3, 2025, primarily due to **$7.7 million** from a common stock subscription and **$6.7 million** from debt conversion to equity with Beyond, Inc - The company issued **4,324,324 shares** to Beyond, Inc. for **$7.7 million** from a subscription agreement[11](index=11&type=chunk) - An additional **4,610,141 shares** were issued to Beyond, Inc. to convert a term loan and accrued interest valued at **$6.7 million**[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly improved to **$3.1 million** for the first 13 weeks of fiscal 2025, with financing activities providing **$3.4 million** primarily from an **$8.0 million** common stock issuance to Beyond, Inc Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 (13 wks ended May 3) | Q1 2024 (13 wks ended May 4) | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,077) | $(13,655) | | Net cash used in investing activities | $(558) | $(764) | | Net cash provided by financing activities | $3,350 | $14,450 | | **Net (decrease) increase in cash** | **$(285)** | **$31** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes disclose substantial doubt about the company's going concern ability due to persistent losses and liquidity issues, detailing the strategic partnership with Beyond, Inc. and subsequent events including an additional term loan and tornado damage to the distribution center - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern for at least 12 months from the issuance date of the financial statements, citing recurring operating losses, negative cash flows, and insufficient liquidity[20](index=20&type=chunk)[23](index=23&type=chunk) - The company entered into a strategic partnership with Beyond, Inc., which included a **$17.0 million** term loan, an **$8.0 million** equity subscription, and collaboration agreements[26](index=26&type=chunk)[61](index=61&type=chunk) - The transactions were completed on February 5, 2025, making Beyond a related party with approximately **40% ownership**[26](index=26&type=chunk)[61](index=61&type=chunk) - On May 7, 2025, the company entered into an additional **$5.2 million** term loan with Beyond for working capital and to support its store conversion strategy[68](index=68&type=chunk) - On May 20, 2025, a tornado damaged the company's Jackson, Tennessee distribution center, causing disruptions to operations, particularly e-commerce[71](index=71&type=chunk) - The company is working with insurance carriers to assess the financial impact[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the negative impact of the macroeconomic environment on Q1 2025 financial performance, emphasizing the strategic partnership with Beyond, Inc. to improve liquidity, while reiterating substantial doubt about the company's going concern status due to severe liquidity constraints [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Net sales for Q1 2025 decreased by **11.2%** to **$81.5 million**, driven by a **26.7%** drop in e-commerce sales, leading to a **460 basis point** decline in gross profit margin and an increased operating loss of **$10.5 million** Q1 2025 vs Q1 2024 Performance | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $81.5M | $91.8M | -11.2% | | Comparable Sales | -8.9% | N/A | N/A | | E-commerce Comp Sales | -26.7% | N/A | N/A | | Gross Profit Margin | 24.9% | 29.5% | -460 bps | | Operating Loss | $(10.5)M | $(7.5)M | +40.1% | - The decrease in gross profit margin was primarily due to a **340 basis point** decline in merchandise margin from increased promotions and a **210 basis point** increase in store occupancy costs as a percentage of sales[88](index=88&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company's critical liquidity position leads to a going concern warning, with insufficient near-term liquidity despite financing from Beyond, Inc., and no borrowing availability under its revolving credit facility as of June 17, 2025 - There is substantial doubt about the company's ability to continue as a going concern for at least 12 months due to projected insufficient liquidity[104](index=104&type=chunk) - The company violated affirmative covenants on its credit facilities on May 2, 2025, due to the going concern opinion in its annual report, but received waivers from lenders on May 7, 2025[105](index=105&type=chunk) - As of June 17, 2025, the Company had **no availability for borrowing** under its revolving credit facility, after accounting for the minimum required excess availability covenant[72](index=72&type=chunk)[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is exposure to interest rate fluctuations on its variable-rate long-term debt, with no derivative instruments currently used for hedging - The company is exposed to **interest rate changes** as borrowings under its long-term debt agreements bear interest at variable rates[114](index=114&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of May 3, 2025, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of May 3, 2025, the company's **disclosure controls and procedures were effective**[116](index=116&type=chunk) - No **material changes** in internal control over financial reporting occurred during the last fiscal quarter[117](index=117&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against several legal matters, including putative class action lawsuits for wage and hour violations and a commercial dispute, which management believes will not materially adversely affect financial condition - The company is defending against a putative class action in California regarding wage and hour violations (Miles v. Kirkland's Stores, Inc.)[44](index=44&type=chunk) - A putative class action in New York (Sicard v. Kirkland's Stores, Inc.) alleges violations of New York Labor Law for untimely wage payments[45](index=45&type=chunk) - Rugs America Corp. has sued the company for **$5 million** for an alleged breach of a 2019 agreement; the company has filed a counterclaim and believes the claim is without merit[46](index=46&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred to the company's previously disclosed risk factors, which include liquidity challenges, going concern ability, and reliance on the strategic partnership with Beyond - There have been **no material changes** to the company's risk factors as previously disclosed in the Annual Report on Form 10-K[120](index=120&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock during the quarter, with approximately **$26.3 million** remaining available under the existing share repurchase plan - The company **did not repurchase any shares** of common stock during the quarter[121](index=121&type=chunk) - As of May 3, 2025, approximately **$26.3 million** remained under the current share repurchase plan[121](index=121&type=chunk) [Other Information](index=27&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended May 3, 2025 - No directors or officers adopted or terminated a **Rule 10b5-1 trading arrangement** during the quarter[122](index=122&type=chunk) [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including amended agreements with Beyond, Inc., officer certifications, and Inline XBRL data files - The report includes several exhibits, such as **amended agreements with Beyond, Inc.**, and **certifications by the CEO and CFO**[123](index=123&type=chunk)
Kirkland's, Inc. to Rebrand as The Brand House Collective, Inc. Accelerating Brand Conversions Utilizing Bed Bath & Beyond, Overstock, buybuy Baby
Prnewswire· 2025-06-17 11:01
Core Viewpoint - Kirkland's, Inc. is rebranding to The Brand House Collective, Inc. to reflect its transformation into a multi-brand merchandising and retail operator, aligning with Beyond, Inc.'s portfolio of home and family brands [1][2] Corporate Name Change - The company plans to officially change its name to The Brand House Collective pending shareholder approval at the annual meeting on July 24, 2025, along with a ticker symbol change from "KIRK" to "TBHC" [10] Operational Strategy - The company is executing an operational reset to streamline its footprint, reduce excess inventory, and optimize real estate assets, aiming to operate approximately 290 store locations as the foundational footprint for its brands [3][4] Brand Conversion Strategy - The reintroduction of Bed Bath & Beyond Home will involve converting existing Kirkland's Home stores, with the first store opening in Brentwood, TN in August 2025, and plans to convert approximately 75 stores through 2026 [4][5] Corporate Reorganization - A comprehensive corporate reorganization has been implemented to enhance performance and accountability, with a streamlined structure where all brand leaders report directly to the CEO, Amy Sullivan [6][7] Board of Directors Changes - The Board appointed four new directors effective June 24, 2025, to support the company's new vision, while several existing directors have resigned [8][9] Leadership Team Enhancements - The leadership team has been bolstered with experienced professionals in retail and merchandising to align with the company's transformation goals [11][12]
KIRKLAND'S REPORTS FIRST QUARTER FISCAL 2025 RESULTS
Prnewswire· 2025-06-17 11:00
Core Insights - Kirkland's, Inc. announced a significant transformation, including a corporate reorganization and changes to its Board of Directors, aiming to enhance performance and profitability as a multi-brand retail operator [1][19][20]. Financial Performance - For the first quarter of 2025, net sales were $81.5 million, down from $91.8 million in the same period last year, primarily due to declines in e-commerce and comparable store sales [4][8]. - Comparable sales decreased by 8.9%, with a 3.1% drop in comparable store sales and a 26.7% decline in e-commerce sales [4][8]. - Gross profit was $20.3 million, representing 24.9% of net sales, compared to $27.1 million or 29.5% of net sales in the prior year [5][8]. - Operating expenses were $30.8 million, or 37.8% of net sales, a slight decrease from $34.6 million or 37.7% of net sales in the previous year [6][8]. - The operating loss for the quarter was $10.5 million, compared to a loss of $7.5 million in the prior year [7][8]. - Net loss was $11.8 million, or a loss of $0.54 per diluted share, compared to a loss of $8.8 million or $0.68 per diluted share in the prior year [8][11]. Operational Changes - The company is focusing on moving excess and slower-turning inventory and eliminating underperforming assets while expanding the utilization of licenses from Bed Bath & Beyond, Overstock, and buybuy Baby [3][19]. - Kirkland's plans to rebrand itself as "The Brand House Collective, Inc." pending shareholder approval, reflecting its transformation into a multi-brand merchandising and retail operator [19][20]. Debt and Financial Position - As of May 3, 2025, the company had a cash balance of $3.5 million and $38.9 million in outstanding debt [13][17]. - The company closed a $5.2 million expansion of its existing credit agreement with Beyond, which also included amendments to existing transactions [15][16]. - The company experienced disruptions at its Jackson, Tennessee distribution center due to a tornado, impacting its e-commerce operations [18]. Inventory and Store Count - Inventory as of May 3, 2025, was $76.4 million, a 0.8% increase compared to the prior year [12]. - The company closed three stores during the quarter, ending with a total of 314 stores [8].
Kirkland's to Report First Quarter Fiscal 2025 Financial Results on June 17, 2025
Prnewswire· 2025-06-10 20:05
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].
Kirkland's(KIRK) - 2025 Q4 - Annual Report
2025-05-02 20:07
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].
Kirkland's(KIRK) - 2025 Q4 - Earnings Call Transcript
2025-05-01 14:02
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]
Kirkland's(KIRK) - 2025 Q4 - Earnings Call Transcript
2025-05-01 13:00
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]
Kirkland's(KIRK) - 2026 Q1 - Quarterly Results
2025-06-17 11:29
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].
Kirkland's(KIRK) - 2025 Q4 - Annual Results
2025-02-18 12:11
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]