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Kirkland's (KIRK)
NASDAQ:KIRK
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Kirkland's
(NASDAQ:KIRK)
38Underperform
Kirkland's (KIRK) vs. S&P 500 (SPY)
Market Cap
$16.53M
Dividend YieldN/A
Average Volume (3M)115.42K
Price to Earnings (P/E)―
Beta (1Y)1.28
Revenue Growth-6.02%
EPS GrowthN/A
CountryUS
Employees900
SectorConsumer Cyclical
Sector Strength56
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-1.60
Shares Outstanding13,117,942
10 Day Avg. Volume109,177
30 Day Avg. Volume115,424
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.04
Price to Cash Flow (P/CF)-0.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.00Price Target Upside58.73% Upside
Rating ConsensusHold
Number of Analyst Covering1
Kirkland's Business Overview & Revenue Model
Company DescriptionKirkland's, Inc. is a specialty retailer in the United States, primarily focused on providing a wide range of home décor products. The company offers an extensive selection of merchandise, including furniture, textiles, wall art, decorative accessories, lighting, and seasonal decor. With a strong emphasis on style and value, Kirkland's operates both physical retail stores and an e-commerce platform, catering to customers seeking to enhance their living spaces with unique and affordable items.
How the Company Makes MoneyKirkland's generates revenue primarily through the sale of its diverse range of home décor products. The company's key revenue streams include sales from its network of physical retail stores across the United States and its online e-commerce platform. These channels allow Kirkland's to reach a broad customer base, offering both in-store shopping experiences and convenient online purchasing options. Kirkland's revenue is significantly influenced by seasonal trends and customer preferences in home decoration, with peak sales typically occurring during holiday seasons when demand for decorative and seasonal items is high. Additionally, Kirkland's occasionally collaborates with designers and brands to introduce exclusive product lines, enhancing its appeal and driving sales.
Kirkland's Financial Statement Overview
Summary
Kirkland's financial performance is under significant pressure, with declining revenue, negative profit margins, and a balance sheet showing negative equity. Operational inefficiencies and cash flow constraints indicate heightened financial risk.Income Statement
Kirkland's has experienced declining revenue and profitability over recent periods. The TTM (Trailing-Twelve-Months) data shows a negative net profit margin and EBIT margin, indicating challenges in maintaining profitability. Gross profit margin has also decreased significantly compared to earlier periods, reflecting increased cost pressures or reduced sales efficiency. Revenue growth rate is negative, highlighting a contraction in sales, and both EBIT and EBITDA margins are negative, signifying operational challenges.35
Negative
Balance Sheet
Kirkland's current balance sheet reveals significant financial distress. The company has a negative stockholders' equity position, indicating that liabilities exceed assets, and a high debt-to-equity ratio due to negative equity, which poses substantial financial risk. Return on Equity (ROE) is not calculable due to negative equity, and the equity ratio is negative, underscoring financial instability and potential solvency issues.20
Very Negative
Cash Flow
Kirkland’s cash flow statement reflects negative operating cash flow and free cash flow, indicating cash generation challenges. The Free Cash Flow to Net Income ratio is not meaningful due to negative figures. The Operating Cash Flow to Net Income ratio is also negative, suggesting inefficiencies in converting income into cash. These factors highlight liquidity pressures and constraints on financial flexibility.30
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 458.41M | 468.69M | 498.82M | 558.18M | 543.50M | 603.88M | Gross Profit |
| 85.54M | 126.99M | 119.79M | 188.43M | 172.38M | 165.43M | EBIT |
| -12.11M | -24.41M | -40.68M | 25.34M | 26.61M | -33.81M | EBITDA |
| -4.17M | -11.94M | -25.89M | 46.12M | 31.92M | -24.41M | Net Income Common Stockholders |
| -20.90M | -27.75M | -44.69M | 22.03M | 16.64M | -53.27M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 58.83M | 3.81M | 5.17M | 25.00M | 100.34M | 30.13M | Total Assets |
| 180.81M | 250.57M | 274.25M | 331.19M | 389.42M | 422.44M | Total Debt |
| 30.33M | 173.79M | 171.11M | 152.29M | 196.41M | 248.89M | Net Debt |
| -28.50M | 169.99M | 165.94M | 127.29M | 96.07M | 218.76M | Total Liabilities |
| 77.88M | 247.45M | 244.47M | 250.06M | 294.89M | 345.49M | Stockholders Equity |
| 102.93M | 3.12M | 29.77M | 81.13M | 94.53M | 76.95M |
| Cash Flow | Free Cash Flow | ||||
| -13.94M | -19.25M | -26.27M | -37.91M | 69.86M | -23.95M | Operating Cash Flow |
| -10.82M | -14.48M | -18.15M | -30.79M | 78.56M | -8.27M | Investing Cash Flow |
| -3.08M | -4.63M | -8.06M | -7.06M | -8.49M | -15.68M | Financing Cash Flow |
| 14.90M | 17.74M | 6.38M | -37.49M | 131.00K | -3.87M |
Kirkland's Technical Analysis
Positive
1.26
Price Trends
1.30
Negative
1.49
Negative
1.61
Negative
Market Momentum
-0.03
Negative
52.25
Neutral
55.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KIRK, the sentiment is Positive. The current price of 1.26 is above the 20-day moving average (MA) of 1.22, below the 50-day MA of 1.30, and below the 200-day MA of 1.61, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 52.25 is Neutral, neither overbought nor oversold. The STOCH value of 55.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KIRK.
Kirkland's Risk Analysis
Kirkland's disclosed 38 risk factors in its most recent earnings report. Kirkland's reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kirkland's Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $18.70B | 17.23 | 53.91% | 1.56% | -0.50% | 24.11% | |
60 Neutral | $6.78B | 11.63 | 3.24% | 4.20% | 2.36% | -21.91% | |
59 Neutral | $297.28M | 15.33 | 6.48% | 7.10% | -16.15% | -66.79% | |
56 Neutral | $153.89M | ― | -3.83% | 4.36% | -11.78% | -13.89% | |
48 Neutral | $3.45B | 51.13 | -38.18% | ― | 5.01% | -35.45% | |
38 Underperform | $16.53M | ― | 77.02% | ― | -6.02% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
KIRK
Kirkland's
1.26
-0.68
-35.05%
BSET
Bassett Furniture
17.87
5.46
44.00%
HVT
Haverty
18.31
-11.44
-38.45%
WSM
Williams-Sonoma
151.40
12.49
8.99%
RH
RH
184.35
-64.56
-25.94%
Kirkland's Earnings Call Summary
Earnings Call Date: Dec 6, 2024 | % Change Since: -37.62% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a positive shift in operational efficiency and strategic repositioning with improvements in gross profit margin, customer traffic, and inventory management. However, significant challenges remain with declining net sales and negative adjusted EBITDA. The sentiment is cautiously optimistic as the company executes its turnaround strategy.Highlights
Improved Gross Profit Margin
Gross profit margin increased by 130 basis points to 26.3% compared to 25% in the previous year, driven by a 110 basis point increase in merchandise margin and decreased central distribution costs.
Sequential Improvement in Comparable Sales
Comparable sales improved from a decline of 13% in August to 6% in October, showing a monthly sequential improvement throughout the quarter.
Cost Reduction Success
Operating expenses were reduced by over $2 million compared to the prior year, reflecting effective cost containment strategies.
Increased Customer Engagement
A 20% increase in lapsed customer reactivations and a significant improvement in e-commerce traffic decline from negative 17% to negative 3%.
Inventory Management
Inventory levels decreased by 17% compared to the previous year, improving supply chain efficiency and positioning for the holiday season.
Lowlights
Decline in Net Sales
Net sales decreased to $116.4 million from $131 million in the prior year quarter, with a 9.2% decline in comparable sales.
Continued Challenges in High-Ticket Categories
Inflation affected customer purchases in high-ticket categories like furniture and wall decor, although strategic shifts are being made to address this.
Negative Adjusted EBITDA
Adjusted EBITDA was negative $3.2 million, compared to negative $1.7 million in the prior year, indicating ongoing operational challenges.
Interest Expense Increase
Net interest expense rose to $1.2 million from $0.7 million due to higher interest rates.
Company Guidance
During the third-quarter 2024 earnings call for Kirkland's, the company provided several key metrics and guidance updates. The call highlighted sequential improvements in traffic and comparable sales, with traffic declines improving from 14% in August to 4% in October, and comparable sales improving from a 13% decline in August to a 6% decline in October. Gross profit margin increased by 130 basis points to 26.3%, driven by a merchandise margin improvement of 110 basis points. Additionally, Kirkland's saw a 20% increase in lapsed customer reactivations and an 8% sales increase in the decorative accessories category. The company reported a 17% reduction in inventory levels compared to the previous year and reduced operating expenses by over $2 million. Looking ahead, Kirkland's expects a low single-digit increase in comparable sales and further improvements in merchandise margins in the fourth quarter.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.