Kirkland’s reported soft sales during its fourth quarter, as the home décor retailer readied key strategic initiatives aimed at accelerating its growth in 2019.
Net sales for the 13 weeks ended February 2 decreased 3.8% to $216.1 million compared to $224.6 million for the 14 weeks ended February 3, 2018. Comparable store sales, including e-commerce sales, decreased 3.3% compared to an increase of 2% in the prior-year quarter. Negative store traffic was partially offset by an improvement in conversion. E-commerce sales were driven by gains in traffic.
Net income for fourth quarter was $14.2 million, or $0.95 per diluted share, compared to net income of $12.9 million, or $0.79 per diluted share, for the 14 weeks ended February 3, 2018.
For the full fiscal year, net sales increased 2% to $647.1 million compared to $634.1 million for the 53 weeks ended February 3, 2018. Comparable store sales, including e-commerce sales, decreased 1.3% compared to an increase of 0.3% in the prior-year period.
Net income for the fiscal year was $3.8 million, or $0.24 per diluted share, compared to net income of $5.3 million, or $0.33 per diluted share, for the previous fiscal year. Adjusted earnings, excluding severance and other charges associated with the company’s CEO transition, was $5.9 million, or $0.38 per diluted share.
“Since coming on board, I’ve spent time visiting stores, meeting Kirkland’s employees and customers, and doing some deep dives with a particular focus on merchandising, product design and branding,” said Woody Woodward, CEO, Kirkland’s. “What is clear to me is that Kirkland’s has a strong value proposition that resonates with our shopper, and we have a robust operational focus that’s driving improvement in key areas of the business. While we made progress in key operational areas in 2018, we are disappointed with our overall performance and believe we need to accelerate the pace of change within the organization. We are taking meaningful steps to further transform the business to address ongoing changes in home décor retailing.”
Kirkland’s said its key strategic initiatives for 2019 include advancing new product categories that broaden its reach; accelerating direct sourcing to lower the cost of goods; optimizing the supply chain to alleviate cost pressures and moderate freight headwinds; leveraging analytics to sharpen pricing and promotional strategies; and improving omnichannel customer growth and profitability.