As it welcomed a new CEO and battled higher freight and store occupancy costs, Kirkland’s posted a narrower net loss as its comps gained in the third quarter.
The company reported a net loss of $2.8 million, or 18 cents per diluted share, versus a net loss of $2.4 million, or 15 cents per diluted share, in the period a year earlier. Adjusted net loss, excluding charges associated with the transition in the company CEO office, was $2 million, or 13 cents per diluted share. Adjusted diluted loss per share beat a MarketBeat analyst consensus estimate of 16 cents.
Comparable sales, including e-commerce revenues, increased 1.4% versus the year-prior quarter, as gains in conversion and average ticket partially offset negative but better store traffic trends versus the 2017 period. E-commerce sales improved in the quarter year over year due to increases in traffic and conversion.
Net sales advanced 6.6% to $154.6 million versus the year-previous quarter. Net sales gained as store count and e-commerce revenue increased. Operating loss decreased to $3.6 million from $3.8 million in the period the year before.
Kirkland’s said it suffered a negative financial impact from a decline in merchandise margin primarily due to higher inbound freight costs and the deleverage of store occupancy costs.
“I am excited to join the Kirkland’s team and encouraged with the ongoing initiatives as well as the energy across the company,” said Steve Woodward, the company’s new CEO. “At the same time, I believe there is significant opportunity to improve the consistency and relevancy of our assortments to make Kirkland’s the destination of choice for quality home décor at an affordable price.”
Mike Cairnes, Kirkland’s president and COO, added, “Quarterly performance benefitted from strong sell through of seasonal merchandise and continued progress in operating performance. E-commerce trends improved in the quarter while expenses and inventory remained well managed. We are operating the business with greater efficiency and believe we are well positioned to deliver a solid holiday season.”