Kirkland's (KIRK) AI Stock Analysis

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Kirkland's

(NASDAQ:KIRK)

Rating:38Underperform

Price Target:

$1.00

▼(-14.53%Downside)

Kirkland's overall stock score reflects significant financial distress, highlighted by declining revenues, negative cash flows, and solvency risks. The bearish technical signals further contribute to the low score, while valuation metrics reflect the company's ongoing challenges.

Kirkland's (KIRK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$25.16M

Dividend YieldN/A

Average Volume (3M)171.54K

Price to Earnings (P/E)―

Beta (1Y)1.22

Revenue Growth-5.83%

EPS Growth18.04%

CountryUS

Employees835

SectorConsumer Cyclical

Sector Strength73

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.54

Shares Outstanding22,461,384

10 Day Avg. Volume199,474

30 Day Avg. Volume171,543

Financial Highlights & Ratios

PEG Ratio0.06

Price to Book (P/B)0.06

Price to Sales (P/S)0.00

P/FCF Ratio-1.90

Enterprise Value/Market Cap8.20

Enterprise Value/Revenue0.11

Enterprise Value/Gross Profit2.41

Enterprise Value/Ebitda-6.40

Forecast

1Y Price Target

$2.00

Price Target Upside70.94% Upside

Rating ConsensusHold

Number of Analyst Covering1

Kirkland's Business Overview & Revenue Model

Company DescriptionKirkland's, Inc. operates as a specialty retailer of home furnishings décor in the United States. The company's stores provide various merchandise, including holiday décor, furniture, textiles, ornamental wall décor, decorative accessories, art, mirrors, home fragrance, lighting, floral, housewares, and gifts. The company operates its stores under the Kirkland's, Kirkland's Home, Kirkland's Home Outlet, Kirkland's Outlet, and The Kirkland Collection names. As of January 29, 2022, the company operated 361 stores in 35 states, as well as an e-commerce website, www.kirklands.com. Kirkland's, Inc. was founded in 1966 and is headquartered in Brentwood, Tennessee.

How the Company Makes MoneyKirkland's generates revenue primarily through the sale of its home decor products via its network of physical retail locations and its e-commerce platform. The company's key revenue streams include in-store sales, online sales, and seasonal promotions that attract customers seeking decor for various occasions and holidays. By offering an extensive range of products at competitive prices, Kirkland's aims to appeal to budget-conscious consumers. Additionally, the company leverages its brand reputation and customer loyalty programs to drive repeat purchases, while strategic marketing campaigns and collaborations with designers or influencers help to boost brand visibility and attract new customers.

Kirkland's Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q3-2024)

% Change Since: 1.74%|

Next Earnings Date:Jun 05, 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.

Q3-2024 Updates

Positive Updates

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.

Negative Updates

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.

Kirkland's Financial Statement Overview

Summary

Kirkland's financial position is weak, with declining revenues, persistent losses, and cash flow challenges. High debt levels and negative equity indicate solvency risks, while negative cash flows limit financial flexibility.

Income Statement

Neutral

Kirkland's has experienced declining revenues over the years, with a significant drop from 2022 to 2025. The gross profit margin has also decreased over time, indicating cost pressures or inefficiencies. The company has been consistently reporting negative EBIT and net income, highlighting ongoing operational challenges and lack of profitability. The revenue growth rate is negative, showing a declining sales trend.

Balance Sheet

Negative

The company shows a negative equity position in the recent year due to accumulated losses, which is a significant risk. The debt-to-equity ratio is not applicable due to negative equity, but high debt levels relative to assets indicate potential solvency issues. The declining total assets and negative stockholders' equity signal financial instability.

Cash Flow

Negative

Kirkland's has consistently reported negative operating and free cash flows, indicating cash flow challenges. The free cash flow has not shown positive growth, impacting the company's ability to reinvest or reduce debt. The operating cash flow to net income ratio is negative, suggesting the company is not converting its earnings into cash effectively.

TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
458.41M	441.36M	468.69M	498.82M	558.18M	543.50M
	Gross Profit
85.54M	122.01M	126.99M	119.79M	188.43M	172.38M
	EBIT
-12.11M	-14.03M	-24.41M	-40.68M	25.34M	26.61M
	EBITDA
-5.04M	-14.03M	-11.94M	-25.89M	46.12M	31.92M
	Net Income Common Stockholders
-20.90M	-23.13M	-27.75M	-44.69M	22.03M	16.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.76M	3.82M	3.81M	5.17M	25.00M	100.34M
	Total Assets
279.81M	242.19M	250.57M	274.25M	331.19M	389.42M
	Total Debt
218.56M	183.64M	173.79M	171.11M	152.29M	196.41M
	Net Debt
211.80M	179.82M	169.99M	165.94M	127.29M	96.07M
	Total Liabilities
306.95M	261.20M	247.45M	244.47M	250.06M	294.89M
	Stockholders Equity
-27.13M	-19.02M	3.12M	29.77M	81.13M	94.53M
Cash Flow		Free Cash Flow
-13.94M	-21.64M	-19.25M	-26.27M	-37.91M	69.86M
	Operating Cash Flow
-10.82M	-19.25M	-14.48M	-18.15M	-30.79M	78.56M
	Investing Cash Flow
-3.08M	-2.35M	-4.63M	-8.06M	-7.06M	-8.49M
	Financing Cash Flow
14.90M	21.62M	17.74M	6.38M	-37.49M	131.00K

Kirkland's Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.17

Price Trends

50DMA

1.21

Negative

100DMA

1.33

Negative

200DMA

1.55

Negative

Market Momentum

MACD

-0.03

Positive

RSI

47.91

Neutral

STOCH

48.70

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KIRK, the sentiment is Negative. The current price of 1.17 is above the 20-day moving average (MA) of 1.15, below the 50-day MA of 1.21, and below the 200-day MA of 1.55, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 47.91 is Neutral, neither overbought nor oversold. The STOCH value of 48.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 3 New Risks

We may not be able to consummate all elements of the Beyond transaction or satisfy all of the conditions precedent to consummation of the proposed transaction. Q4, 2024

We might not be able to obtain various synergies as contemplated in the Collaboration Agreement. Q4, 2024

There might be unintended and unanticipated negative side effects related to the Beyond transaction. Q4, 2024

Kirkland's Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$6.93B	11.25	2.95%	3.88%	2.69%	-24.71%
KIRK	38 Underperform	$25.16M	―	77.02%	―	-5.83%	18.04%
LTRY		$41.12M	―	-98.11%	―	―	―
LXEH		$238.00K	―	-16.22%	―	―	―
RENT	56 Neutral	$25.10M	―	47.49%	―	2.68%	43.98%
LVLU	43 Neutral	$17.42M	―	-179.00%	―	-11.33%	-183.48%
DTCB	43 Neutral	$5.35M	―	-67.84%	―	-9.23%	-3.69%

* Consumer Cyclical Sector Average

Performance Comparison

KIRK

Kirkland's

1.17

-0.70

-37.43%

LTRY

Lottery.com

1.39

-0.36

-20.57%

LXEH

Lixiang Education Holding Co

1.89

-1.44

-43.24%

RENT

Rent the Runway

6.74

-20.07

-74.86%

DTCB

Solo Brands

0.08

-1.84

-95.83%

LVLU

Lulu's Fashion Lounge Holdings

0.42

-1.39

-76.80%

Kirkland's Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

Kirkland’s Expands Partnership with Beyond, Inc.

Negative

May 12, 2025

On May 7, 2025, Kirkland’s, Inc. expanded its strategic partnership with Beyond, Inc., closing a $5.2 million credit agreement expansion to support its store conversion strategy and enhance financial flexibility. The agreement allows Beyond to convert debt into Kirkland’s stock and includes amendments to existing collaboration and investor rights agreements, aiming to leverage brand synergies and improve operational efficiencies. Despite receiving waivers for prior defaults, Kirkland’s management acknowledges ongoing material uncertainty regarding its ability to continue as a going concern.

The most recent analyst rating on (KIRK) stock is a Buy with a $7.0000 price target. To see the full list of analyst forecasts on Kirkland’s stock, see the KIRK Stock Forecast page.

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.