Kirkland’s turned a profit on an adjusted basis in the second quarter and sees good things ahead as the retailer increased its comparable sales and e-commerce business.
Net loss in the quarter was $9.4 million, or 66 cents per diluted share, versus a net loss of $17.1 million, or $1.21 per diluted share, in the year-previous period. Adjusted for one-time events, net income was $314 million, or two cents per diluted share, versus a net loss of $14 million, or 99 cents per diluted share, in the period in the year before.
An analyst consensus estimate published by MarketBeat called for an adjusted diluted earnings per share loss of 88 cents.
Kirkland’s stated that net sales increased 4% in the quarter year over year to $124.7 million with 44 fewer stores in operation and a comparable sales increase of 10.2%, including e-commerce growth of 77.1% versus the period in the year past. Operating loss was $5.3 million versus $21 million in the year-earlier period.
“Positive trends and our dramatically improved business model enabled us to reach second quarter profitability on an adjusted basis for the first time in a decade,” said Woody Woodward, Kirkland’s CEO. “The hard work we have put in over the last several quarters continues to pay off with our elevated merchandise assortment and increased brand awareness driving the positive sales and margin trends through the quarter. With the accelerated infrastructure improvements, continued margin expansion and a commitment to maintaining a much leaner cost structure, we are experiencing tremendous leverage in the business. Reaching profitability on an adjusted basis during this period and driving the margin improvement and comparable sales to the extent we have is a significant and well-earned accomplishment. Our business is experiencing tailwinds from the favorable dynamics within the home segment and fewer store-based competitors than a year ago, but we are also seeing momentum created by our own merchandising, brand, omnichannel, infrastructure and cost reduction initiatives. We are far from finished on our journey to build Kirkland’s into a stronger brand with a clear design point of view at an attainable pricepoint, and we are focused on continuing to make the right decisions for the long-term benefit of Kirkland’s and our shareholders.”