The third quarter held incremental gains at Kirkland’s Home, the company asserted, with a Wall Street beat on earnings despite a significant comp decline.
Kirkland’s topped a MarketBest-published analyst consensus estimate by four cents.
In the quarter, comparable store sales slid 9.2%, year over year, including an 8.5% decline in e-commerce sales, the company reported. A decline in traffic and a lower average ticket, partially offset by increased conversion, drove the decrease. Net sales in the period were $116.4 million compared to $131 million in the prior-year quarter. Operating loss was $6.7 million essentially flat to the 2022 period while adjusted operating loss was $6 million versus $5.7 million in the year-before quarter.
Kirkland’s closed one store and relocated another to end the quarter with 339 locations.
“The third quarter demonstrated execution of our strategic repositioning as we experienced sequential improvements in traffic and comparable sales each month of the quarter, along with expanded gross margins,” said Ann Joyce, Kirkland’s interim CEO, in announcing the financial results. “Over the last six months, we have spent a significant amount of time assessing every aspect of the business and acted quickly to implement changes to better position us going into our ever-important holiday selling season. During the quarter, we saw promising indicators that our pivots are beginning to work. We increased lapsed customer reactivations, drove improved traffic and conversion with less promotional activity, reduced operating expenses, and improved our inventory position for the remainder of the year.”
Although ongoing macroeconomic challenges continue to weigh on consumers, Joyce said, “We believe that our renewed emphasis on value and seasonally relevant décor is beginning to resonate with our customers. In fact, the trend continued into the fiscal fourth quarter, which has started off with a low single-digit increase in comparable sales for the month of November at a much-improved merchandise margin as we continue to execute against our holiday promotional strategy.”
