KIRK - Kirkland's posts lighter than expected quarterly loss

2023-06-08 07:17:08 ET

Kirkland’s ( NASDAQ: KIRK ) stock edge lower in premarket trading as margin contraction and comparable sales declines overshadowed a headline beat.

The Tennessee-based specialty retailer topped expectations for the reported a $0.95 per share loss on $96.9M in revenue.  Analysts had anticipated a $1.02 loss per share on $93.58M in revenue. Comparable same-store sales decreased 4.4% from the prior year quarter, including a 6.6% decline in e-commerce sales.

Inventory levels remained largely stable at $83.33M as compared to $84.07M at the start of the year. Gross margins contracted 70 basis points year over year.

“During the first quarter, we placed renewed emphasis on our overall value proposition and better aligned the brand voice through improved marketing, promotional strategy and seasonally relevant décor,” interim CEO Ann Joyce said. “While a challenging consumer spending environment continued to affect traffic during the quarter, we achieved positive comparable sales for the month of April as customers responded well to our promotions and omni-channel experience. Our merchandise margins began to expand during the quarter as the benefits of lower freight and product costs started to flow through our results, and we expect this to become more meaningful in the upcoming quarters.”

She added that the company is “strategically optimizing” promotional activity for the remainder of 2023 in order to protect margins while still maintaining the interest of value-conscious consumers.

“We are developing an improved retail strategy focused on an intentional promotional calendar, with flexibility to respond to an evolving consumer and ever-changing seasonal trends. I am confident in our team and our ability to capitalize on these opportunities,” Joyce concluded.

Kirkland’s ( KIRK ) stock slumped over 5% on very light premarket volume following the report .

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