KIRKLAND'S ACCELERATES TRANSFORMATION FOCUSED ON PATH TO PROFITABILITY
Kirkland's (KIRK) provided a Q4 2024 business update and strategic transformation plans. The company expects Q4 net sales of approximately $148 million with a consolidated comparable sales decline of 0.6%, including brick-and-mortar store growth of 1.6% and e-commerce decline of 7.9%. Projected Q4 net income is $7.9 million with diluted EPS of $0.50.
The company outlined three key strategic initiatives: improving/eliminating underperforming assets (identifying 6% of stores not meeting profitability standards), optimizing e-commerce performance through Beyond Inc. partnership, and maximizing Kirkland's Home brand value through distribution across their family of brands including Bed Bath & Beyond, buybuy Baby, and Overstock.
As of February 17, 2025, Kirkland's had $41.9 million in outstanding borrowings and letters of credit, with $8.2 million available after minimum required availability covenant, and $8.5 million in debt to Beyond, Inc.
Kirkland's (KIRK) ha fornito un aggiornamento sulle attività del quarto trimestre 2024 e sui piani di trasformazione strategica. L'azienda prevede vendite nette nel quarto trimestre di circa 148 milioni di dollari, con una diminuzione delle vendite comparabili consolidate dello 0,6%, includendo una crescita dei negozi fisici dell'1,6% e una diminuzione dell'e-commerce del 7,9%. Il reddito netto previsto per il quarto trimestre è di 7,9 milioni di dollari con un utile per azione diluito di 0,50 dollari.
L'azienda ha delineato tre iniziative strategiche chiave: migliorare/eliminare gli asset poco performanti (identificando il 6% dei negozi che non soddisfano gli standard di redditività), ottimizzare le performance dell'e-commerce attraverso la partnership con Beyond Inc., e massimizzare il valore del marchio Kirkland's Home attraverso la distribuzione tra la loro famiglia di marchi, inclusi Bed Bath & Beyond, buybuy Baby e Overstock.
Al 17 febbraio 2025, Kirkland's aveva 41,9 milioni di dollari in prestiti e lettere di credito non rimborsati, con 8,2 milioni di dollari disponibili dopo il covenant di disponibilità minima richiesta, e 8,5 milioni di dollari di debito verso Beyond, Inc.
Kirkland's (KIRK) proporcionó una actualización comercial del cuarto trimestre de 2024 y planes de transformación estratégica. La empresa espera ventas netas en el cuarto trimestre de aproximadamente 148 millones de dólares, con una disminución de las ventas comparables consolidadas del 0,6%, incluyendo un crecimiento de las tiendas físicas del 1,6% y una disminución del comercio electrónico del 7,9%. Se proyecta que el ingreso neto del cuarto trimestre sea de 7,9 millones de dólares con un EPS diluido de 0,50 dólares.
La empresa delineó tres iniciativas estratégicas clave: mejorar/eliminar activos de bajo rendimiento (identificando el 6% de las tiendas que no cumplen con los estándares de rentabilidad), optimizar el rendimiento del comercio electrónico a través de la asociación con Beyond Inc., y maximizar el valor de la marca Kirkland's Home a través de la distribución en su familia de marcas, incluyendo Bed Bath & Beyond, buybuy Baby y Overstock.
Al 17 de febrero de 2025, Kirkland's tenía 41,9 millones de dólares en préstamos pendientes y cartas de crédito, con 8,2 millones de dólares disponibles después del convenio de disponibilidad mínima requerida, y 8,5 millones de dólares de deuda con Beyond, Inc.
Kirkland's (KIRK)는 2024년 4분기 사업 업데이트와 전략적 전환 계획을 제공했습니다. 회사는 4분기 순매출이 약 1억 4800만 달러에 이를 것으로 예상하며, 이는 통합 비교 매출이 0.6% 감소하는 것을 포함합니다. 오프라인 매장 매출은 1.6% 증가하고, 전자상거래는 7.9% 감소할 것으로 보입니다. 4분기 예상 순이익은 790만 달러이며, 희석 주당순이익(EPS)은 0.50 달러입니다.
회사는 세 가지 주요 전략적 이니셔티브를 제시했습니다: 저조한 성과를 보이는 자산 개선/제거(수익성 기준을 충족하지 못하는 매장 6% 식별), Beyond Inc.와의 파트너십을 통한 전자상거래 성과 최적화, 그리고 Bed Bath & Beyond, buybuy Baby, Overstock를 포함한 브랜드 가족을 통한 Kirkland's Home 브랜드 가치 극대화입니다.
2025년 2월 17일 기준으로 Kirkland's는 4190만 달러의 미지급 대출 및 신용장을 보유하고 있으며, 최소 요구 가용성 약정 이후 820만 달러가 사용 가능하고, Beyond, Inc.에 대한 부채는 850만 달러입니다.
Kirkland's (KIRK) a fourni une mise à jour commerciale pour le quatrième trimestre 2024 ainsi que des plans de transformation stratégique. L'entreprise s'attend à des ventes nettes pour le quatrième trimestre d'environ 148 millions de dollars, avec une baisse des ventes comparables consolidées de 0,6 %, y compris une croissance des magasins physiques de 1,6 % et une baisse du commerce électronique de 7,9 %. Le revenu net projeté pour le quatrième trimestre est de 7,9 millions de dollars avec un BPA dilué de 0,50 dollar.
L'entreprise a esquissé trois initiatives stratégiques clés : améliorer/éliminer les actifs sous-performants (identifiant 6 % des magasins ne respectant pas les normes de rentabilité), optimiser les performances du commerce électronique grâce à un partenariat avec Beyond Inc., et maximiser la valeur de la marque Kirkland's Home grâce à une distribution au sein de leur famille de marques, y compris Bed Bath & Beyond, buybuy Baby et Overstock.
Au 17 février 2025, Kirkland's avait 41,9 millions de dollars en prêts et lettres de crédit non réglés, avec 8,2 millions de dollars disponibles après la clause de disponibilité minimale requise, et 8,5 millions de dollars de dettes envers Beyond, Inc.
Kirkland's (KIRK) hat ein Geschäftsupdate für das 4. Quartal 2024 und strategische Transformationspläne bereitgestellt. Das Unternehmen erwartet im 4. Quartal einen Nettoumsatz von etwa 148 Millionen Dollar, mit einem Rückgang der konsolidierten vergleichbaren Verkaufszahlen um 0,6%, einschließlich eines Wachstums der stationären Geschäfte um 1,6% und einem Rückgang des E-Commerce um 7,9%. Der prognostizierte Nettogewinn für das 4. Quartal beträgt 7,9 Millionen Dollar bei einem verwässerten EPS von 0,50 Dollar.
Das Unternehmen skizzierte drei wichtige strategische Initiativen: Verbesserung/Eliminierung von leistungsschwachen Vermögenswerten (Identifizierung von 6% der Geschäfte, die die Rentabilitätsstandards nicht erfüllen), Optimierung der E-Commerce-Performance durch eine Partnerschaft mit Beyond Inc. und Maximierung des Wertes der Marke Kirkland's Home durch Distribution in ihrer Markenfamilie, einschließlich Bed Bath & Beyond, buybuy Baby und Overstock.
Am 17. Februar 2025 hatte Kirkland's 41,9 Millionen Dollar an ausstehenden Krediten und Akkreditiven, mit 8,2 Millionen Dollar, die nach der Mindestverfügbarkeitsklausel verfügbar sind, und 8,5 Millionen Dollar Schulden bei Beyond, Inc.
- Brick-and-mortar store sales growth of 1.6% in Q4 2024
- Q4 2024 expected net income of $7.9 million with $0.50 EPS
- Strategic partnership with Beyond Inc. expanding brand portfolio
- Planned expansion of Kirkland's Home private label distribution across multiple brands
- Overall comparable sales decline of 0.6% in Q4 2024
- E-commerce sales decline of 7.9% in Q4 2024
- 6% of stores identified as underperforming requiring action
- High debt level with $41.9 million in outstanding borrowings and availability of $8.2 million
Insights
The preliminary Q4 2024 results and transformation strategy present a complex picture of Kirkland's attempts to navigate challenging retail conditions. While the
The company's liquidity position raises red flags. With
The strategic partnership with Beyond, Inc. and the expansion into multiple brands represents a bold pivot. The plan to leverage Kirkland's Home as a private label across their portfolio, including Bed Bath & Beyond stores, could create valuable synergies and expand market reach. However, this multi-brand strategy requires significant operational expertise and working capital to execute effectively.
The decision to address
The expected Q4 net income of
Provides 4Q24 Business Update; Net Sales of
Amy Sullivan, CEO, to Participate in Virtual Fireside Chat Hosted by Craig-Hallum, Wednesday, February 19th at 2pm ET
Amy Sullivan, CEO of Kirkland's, commented, "Over the past year we delivered significant improvement in key operating metrics while driving consistent positive comparable brick-and-mortar store sales growth as we worked to stabilize the core Kirkland's Home business during the first phase of our transformation. As we enter our next chapter with new assets through our partnership with Beyond, Inc., we are positioned to leverage our collective family of brands as we drive towards our path to profitability. We believe an omnichannel retail strategy focused on customer experience is foundational in building brand health, maximizing lifetime customer value and delivering sustainable profitable growth. We are dedicated to three strategic initiatives as part of our ongoing transformation, ensuring accountability and execution at every level."
- Improve or Eliminate Underperforming Assets: By expanding our portfolio of brands to include Kirkland's Home, Bed Bath & Beyond, buybuy Baby and Overstock, we are setting new benchmarks and raising the bar of expectations. Following a comprehensive review of our entire store footprint, we have identified an initial list of approximately
6% of our stores that do not meet our profitability standards in their current format, and we are aggressively taking actions to address these stores. Such actions include strategically converting stores to a more margin accretive brand, augmenting the assortment strategy to drive improved profitability through the term of the lease, and closing select locations to ensure our real estate investments align to our new standards. As part of our ongoing transformation, we will continue to eliminate or convert underperforming assets to drive revenue growth and improve the profitability of the company. - Optimize E-Commerce Performance: While we have seen sequential improvement in our Kirkland's Home brick & mortar channel, we are not satisfied with our e-Commerce performance. Through our collaboration with Beyond, we intend to leverage their expertise and partnerships to enhance site experience and improve conversion, while our internal team prioritizes profitability. With clear line of sight from our holistic channel analysis, we have begun strategic actions including eliminating SKUs that do not meet margin standards after shipping, handling and returns, strategically expanding product categories to drive average order value and maximizing our omnichannel assets by reallocating lower AUR inventory to brick & mortar stores to maximize our Buy Online Pick-up In Store ("BOPIS") capabilities. Our e-Commerce channel is an integral part of our Kirkland's Home customer journey, and we believe the actions we are taking will deliver a more profitable transaction.
- Maximize Kirkland's Home Brand Value and Distribution: For almost 60 years, Kirkland's Home has been a destination for seasonally relevant home décor, gifts and furnishings. We believe there is a significant opportunity to expand the Kirkland's Home name through private label distribution across our collective family of omnichannel brands. We have commitments from top vendor partners to expand our product development and sourcing capabilities to ensure we can deliver unique Kirkland's Home product specifically curated for each of our omnichannel brands. We intend to leverage the Kirkland's Home brand as the exclusive private label assortment for everyday basics and décor in Bed Bath & Beyond stores expanding the reach of the brand to new customers. In addition, we are exploring opportunities to expand e-commerce distribution in furniture, patio and rugs driving average order value through Kirkland's, Overstock and other marketplaces.
"Inspired by the possibilities for these iconic brands, we are setting higher standards and maintaining a disciplined approach to capital allocation to maximize our liquidity that we believe will not only advance our path to profitability but position Kirkland's for long-term success while delivering value for all shareholders," concluded Sullivan.
Preliminary Financial Results
For the fourth quarter of fiscal 2024, the Company expects net sales of approximately
Fireside Chat
In addition, the Company announced that Amy Sullivan, will participate in a virtual fireside chat hosted by Jeremy Hamblin from Craig-Hallum on Wednesday, February 19, 2025 at 2pm ET.
The event will be webcast live and can be accessed on the Company's Investor Relations website, https://ir.kirklands.com/. An online archive will be available on that site following the fireside chat.
About Kirkland's, Inc.
Kirkland's, Inc. is a specialty retailer of home décor and furnishings in
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or the Company's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "aim," "believe," "can," "may," "will," "estimate," "potential," "continue," "anticipate," "intend," "expect," "could," "would," "project," "forecast," "plan," "possible," "intend," "target," or the negative of these words or other similar expressions that concern the Company's expectations, strategy, priorities, plans, or intentions. Such forward-looking statements involve known and unknown risks and uncertainties, many of which are outside of the Company's control, which may cause the Company's actual results to differ materially from forecasted results. Forward-looking statements in this communication include, but are not limited to, the effect of the transactions entered into with Beyond (the "Transactions") on the Company's business relationships, operating results and business generally; unexpected costs, charges or expenses resulting from the Transactions; potential litigation relating to the Transactions that could be instituted against Beyond, the Company or their affiliates' respective directors, managers or officers, including the effects of any outcomes related thereto; continued availability of capital and financing; the ability to obtain the various synergies envisioned between the Company and Beyond; the ability of the Company to successfully open new stores or re-brand existing Kirkland's Home stores under a Bed Bath & Beyond or other licensed brand; the ability of the Company to successfully market its products to the new customers and expand through new e-commerce platforms and to implement its plans, forecasts and other expectations with respect to its business after the completion of the Transactions and realize additional opportunities for growth and innovation; risks associated with the Company's liquidity including cash flows from operations and the amount of borrowings under the secured revolving credit facility; the Company's ability to successfully implement cost savings and other strategic initiatives intended to improve operating results and liquidity positions; the Company's actual and anticipated progress towards its short-term and long-term objectives including its multi-brand and omni-channel strategy; the risk that natural disasters, pandemic outbreaks, global political events, war and terrorism could impact the Company's revenues, inventory and supply chain; the continuing consumer impact of inflation and countermeasures, including high interest rates, the effectiveness of the Company's marketing campaigns; risks related to changes in
Contact: | Investor Relations Kirkland's, Inc. Mike Madden 1-615-872-4800 | Investor Relations ICR Caitlin Churchill 1-203-682-8200 | Media Kirkland's, Inc. |
Non-GAAP Financial Measures
This business update and the related fireside chat contain certain non-GAAP financial measures, including EBITDA and adjusted EBITDA. These measures are not in accordance with, and are not intended as alternatives to, GAAP financial measures. The Company uses these non-GAAP financial measures internally in analyzing our financial results and believes that they provide useful information to analysts and investors, as a supplement to GAAP financial measures, in evaluating the Company's operational performance.
The Company defines EBITDA as net income before interest, the provision for income tax and depreciation. Adjusted EBITDA is defined as EBITDA adjusted to remove asset impairment, stock-based compensation expense, due to the non-cash nature of this expense, severance, as it fluctuates based on the needs of the business and does not represent a normal recurring operating expense, and any financing related legal or professional fees that, due to their nature, did not qualify for capitalization as deferred debt or equity issuance costs.
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meanings prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. Each non-GAAP financial measure has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP.
The following table shows a preliminary unaudited non-GAAP measure reconciliation of net income to EBITDA and adjusted EBITDA (in thousands) for the periods indicated:
13-Week Period Ended | 14-Week Period Ended | |||||||
February 1, 2025 | February 3, 2024 | |||||||
Net income | $ | 7,882 | $ | 10,117 | ||||
Income tax benefit | (233) | (201) | ||||||
Interest expense | 1,683 | 902 | ||||||
Other income | (142) | (153) | ||||||
Depreciation | 2,269 | 2,862 | ||||||
EBITDA | 11,459 | 13,527 | ||||||
Adjustments: | ||||||||
Asset impairment(1) | 77 | 325 | ||||||
Stock-based compensation expense(2) | 233 | 295 | ||||||
Beyond transaction costs not qualifying for capitalization(3) | 159 | — | ||||||
Severance charges(4) | 58 | 38 | ||||||
Total adjustments | 527 | 658 | ||||||
Adjusted EBITDA | $ | 11,986 | $ | 14,185 | ||||
(1) | Asset impairment charges are related to property and equipment, software costs and cloud computing implementation costs. | |||||||||
(2) | Stock-based compensation expense includes amounts amortized to expense related to equity incentive plans. | |||||||||
(3) | Consulting and legal fees incurred related to the Company's transaction with Beyond that, due to their nature, did not qualify for capitalization as deferred debt or equity issuance costs. Given the magnitude and scope of this strategic transaction, the Company considers the incremental consulting and legal fees incurred not reflective of the ongoing costs to operate its business. | |||||||||
(4) | Severance charges include expenses related to severance agreements and permanent store closure compensation costs. | |||||||||
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SOURCE Kirkland's, Inc.
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