On Tuesday before market open, American retail chain that sells home décor, specializing in furnishings, accessories and gifts, Kirklands (NASDAQ: KIRK), reported their first quarter earnings of $0.06 EPS which missed consensus estimates of $0.09, and revenue of $129.91M (+9.8% Year to Year) that missed analysts’ expectations of $132.32M.
Comparable store sales for the first quarter of fiscal 2016, including e-commerce sales, increased 0.5% compared with an increase of 3.0% in the prior-year quarter. Kirkland's opened 14 stores and closed 8 during the first quarter of fiscal 2016, bringing the total number of stores to 382 at quarter end.
"The first quarter was in line with our expectations as we executed on our strategic priorities in a challenging traffic environment," said Mike Madden, President and Chief Executive Officer. "E-commerce revenues increased 28%, store conversion was positive, and our seasonal categories performed well. As expected, gross margin was impacted by a planned increase in promotional activity and startup costs for our new e-commerce fulfillment center. Operating expenses were tightly managed during the quarter and will remain a focus throughout the year."
"Importantly, we believe we're well-positioned to execute on our plans for 2016," continued Mr. Madden. "Inventory levels are moderating, and our new e-commerce fulfillment center is now fully operational. The fourteen stores we opened in the first quarter are performing above plan, and we expect to have the entire 2016 class open by the end of the third quarter. These developments are alleviating recent pressure on our supply chain and driving better efficiency across the organization as we prepare for the crucial fall and holiday selling periods."
Fiscal 2016 Outlook
Kirkland's maintained its fiscal 2016 outlook given on March 11, 2016, which provides for diluted earnings per share in the range of $0.98 to $1.11.
Shares of KIRK was down as much as 5%, but rebounded back up before market closed on Tuesday.