November 20, 2009 / 1:43 PM / 10 years ago

UPDATE 2-Kirkland's Q3 results beat Street view, shares jump

* Q3 adj EPS $0.23 vs est $0.08

* Q3 revenue $92.4 mln vs est $86.0 mln

* Shares rise 18 pct (Adds conference call details, analyst comment, updates share movement)

By Shobhana Chadha

BANGALORE, Nov 20 (Reuters) - Home accessories retailer Kirkland’s Inc (KIRK.O) posted a better-than-expected quarterly profit, helped by lower markdowns and jump in sales, but said the “deteriorating” unemployment situation and its impact on consumer spending remained a concern.

Shares of the company, which competes with Pier 1 Imports Inc (PIR.N) and larger rival Williams-Sonoma Inc (WSM.N), rose as much as 18 percent Friday on Nasdaq.

Kirkland’s, which sees full-year sales slightly above fiscal 2008, expects sales at stores open at least a year — a key measure of retail strength — increasing about 3 percent to 5 percent in the fourth quarter.

“The company will continue to show positive comps, especially with retail environment expected to improve in the coming months,” analyst David Magee of Suntrust Robinson Humphrey said.

The retailer is also benefiting from its strategy to shift its store base to off-mall locations, driving down occupancy costs.

“Real estate decisions have been a very important factor for the company’s improved performance,” said Magee.

The company, which had earlier said it plans to close 35 stores this year, said it would pull shutters on 17 stores in January 2010.

“We will opportunistically close any unproductive store whether (in) mall or non-mall (locations),” Chief Executive Robert Alderson said on a conference call with analysts.

For the third quarter, Kirkland’s reported net income of $5.6 million, or 27 cents a share, compared with a net loss of $1.5 million, or 7 cents a share, a year ago.

Excluding items, it earned 23 cents a share.

Revenue rose 8 percent to $92.4 million, driven by sales of wall decor, decorative accessories, furniture, candles and lighting.

Analysts on average were expecting earnings of 8 cents per share, on revenue of $86.0 million, according to Thomson Reuters I/B/E/S.

Gross margins for the third quarter rose to 41.3 percent of sales from 33.3 percent a year ago.

Same-store sales increased 11.3 percent in the quarter.

Shares of the company were up 16 percent at $15.36 in afternoon trade. They touched a high of $15.64 earlier in the day. (Reporting by Shobhana Chadha in Bangalore; Editing by Jarshad Kakkrakandy, Anne Pallivathuckal)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below