KIRK - Kirkland's gains after issuing positive outlook on cash flow

Kirkland's ( NASDAQ: KIRK ) traded higher on Tuesday after sliding past consensus expectations with its Q2 earnings report.

The retailer saw comparable sales fall 8.1% during the quarter due largely to a decline in traffic and conversion rates.

Gross profit plunged to 18.1% of sales from 34.6% a year ago as a result chiefly of increased promotional activity used by the comp[any to move through inventory. Higher distribution costs and increased shrink were also margin drags, as well as the impact of lower sales on certain fixed cost components.

EBITDA came in at -$17.5M vs. +$5.4M a year ago.

Looking ahead, Kirkland's ( KIRK ) said it feels confident in its ability to maintain a lean operational cost structure and drive cash flow during the upcoming seasons. The retailer also plans to begin paying down its debt.

Shares of KIRK rose 3.58% on Tuesday to $4.05 vs. the 52-week trading range of $2.99 to $27.22.

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