Kirkland’s sales and earnings declined in the fourth quarter but it still managed a solid beat of Wall Street estimates.
Net income was $12.5 million, or 91 cents per diluted share, the company reported, versus $21.1 million, or $1.39 per diluted share, in the year-previous quarter.
Adjusted for one-time events, net income was $11.4 million, or 84 cents per diluted share, versus $21.5 million. or $1.42 per diluted share, in the year-before period, Kirkland’s maintained.
The company beat a Yahoo Finance-published analyst consensus estimate of 64 cents on earnings and $170.5 million on sales.
Comparable sales declined 8.5% in the quarter year-over-year.
Net sales were $176.2 million for the quarter, Kirkland’s stated, versus $194.9 million in the year-earlier period. Operating income was $14 million versus $28.2 million in the year-prior quarter while adjusted operating income was $15.4 million versus $28.9 million.
For the full year, net income was $22 million, or $1.51 per diluted share, versus $16.6 million, or 1.12 per diluted share, in the annum previous.
Adjusted net income was $20.4 million, or $1.40 per diluted share, versus $14.1 million, or 96 cents per diluted share, in the year before, Kirkland’s indicated.
Net sales were $558.2 million for the full year, Kirkland’s stated, versus $543.5 million in the year earlier. Operating income was $25.3 million versus $8.3 million in the year prior while adjusted operating income was $27.4 million versus $19.3 million.
In announcing fourth-quarter results, Steve “Woody” Woodward, president and CEO of Kirkland’s, said, “As we’ve previously disclosed, the fourth quarter’s holiday shopping season had its challenges with inconsistent traffic patterns and broader supply chain constraints that impacted our financial results. However, our team executed on what we could control, and our results for the quarter and fiscal year were in-line with the expectations we laid out in December. So far in fiscal 2022, we’ve started rolling out our new furniture merchandise as we continue to evolve into a true home furnishings specialty retailer, offering high-quality, high-styled merchandise at a value price point. In fact, we held our first major furniture event in the first weeks of March, and we are pleased with the initial customer feedback we’ve received. With the anticipation that furniture will be one of our largest growth categories this year, we’re committed to having in-home delivery in place by the end of the second quarter and launching a customer acquisition campaign in some of our flagship markets, such as Nashville and Atlanta, to further support this growth category.”
Still, Woodward said, although confident in the evolving merchandising strategy, “we are also remaining cognizant of the current state of the macro environment, with inflation and global geopolitical unrest being top of mind for consumers. We believe the current macro environment has dampened near-term discretionary spending across the consumer landscape, which has negatively affected our in-store and e-commerce traffic volumes. To ensure that we don’t alienate our core legacy customers with our merchandise transition during these uncertain times and as we allow our brand awareness to appropriately align with the shifts we’ve made, we are taking a more gradual approach to our new merchandise roll-out strategies in 2022. As a result, we are also extending the timeline in which we hope to achieve the financial targets that we’ve laid out.
“Overall, we firmly believe in our ability to accomplish the transformation strategy we’ve communicated. We have fortified our inventory position to support our furniture sales growth, we are continuing to strengthen digital capabilities to improve our omnichannel experience, we have reorganized in-store layouts to support our changing product mix, and we anticipate launching the initial phase of our rebranding to Kirkland’s Home by the end of the fiscal first quarter. While we expect ongoing macro constraints to impact our profitability and traffic in the near-term, we are confident in our capabilities to execute on what we can control within our key strategic initiatives and drive shareholder value over the long-term.”