As fourth-quarter sales fell and the company posted a loss, Kirkland’s Home announced that its president and CEO Woody Woodward would retire effective May 31.
In the fourth quarter, Kirkland’s net loss was $3.8 million, or 30 cents per diluted share, versus net income of $12.5 million, or 91 cents per diluted share, in the year-earlier period. Adjusted for one-time changes, net loss was $1.1 million, or nine cents per diluted share, versus adjusted net income of $11.4 million, or 84 cents per diluted share, in the year-prior quarter.
Kirkland’s missed a Yahoo Finance-published analyst consensus estimate of 11 cents per adjusted diluted share and of $164.7 million in sales.
Net sales were $162.5 million versus $176.2 million in the year-before quarter as comparable sales slipped 6.1%, including a 5.5% decline in e-commerce sales. The company pointed out that the decrease primarily resulted from a decline in traffic partially offset by an increase in average ticket. Operating loss was $3.2 million versus operating income of $14 million in the year-previous quarter. The overall decrease primarily resulted from a decline in gross profit and the deleverage of fixed operating costs, according to Kirkland’s.
For the full fiscal year, net loss was $44.7 million, or $3.52 per diluted share, versus net income of $22 million, or $1.51 diluted per share, in the year earlier. Adjusted net loss was $30.4 million, or $2.39 per diluted share, versus adjusted net income of $20.4 million, or $1.40 per diluted share, in the year prior.
Net sales were $498.8 million versus $558.2 million in the year before as comps slid 9%, which included an 11.6% decrease in e-commerce sales. The company maintained that the overall decrease primarily resulted from a decline in traffic and conversion, partially offset by an increase in average ticket. Operating loss was $42.8 million versus operating income of $25.3 million in the year previous. The decrease primarily resulted from the previously cited decline in gross profit and the deleverage of fixed operating costs, Kirkland’s indicated.
Beginning on March 31, Kirkland’s entered into an amended senior credit facility with its existing lender, Bank of America, serving as the administrative agent, collateral agent and lender, the company stated, that increased the face amount of its revolving line of credit to $90 million and extended the maturity date to March 2028.
Joyce has served in executive and senior-level positions for companies such as Chico’s FAS, Aeropostale and Ralph Lauren, Kirkland’s indicated. Sullivan has held various senior-level merchandising positions with Kirkland’s Home for more than a decade, the company pointed out, and, prior to her time at Kirkland’s Home, she held senior-level positions for Express, Lands’ End, Kohl’s and JCPenney.
In announcing the financial results, Woodward, said, “As previously disclosed, we started the fourth quarter with promising sales trends during our Black Friday event, but then declining traffic and the effect of significant inventory reductions on our merchandise mix drove sales lower. Despite these challenges, we were able to generate over $40 million in operating cash flow that was used to pay down debt and strengthen our balance sheet. With better liquidity and a rebalanced merchandise strategy in place, we believe fiscal 2023 will be a year of stabilization. We recognize the importance of regaining market share in our value décor and holiday categories. Shoppers in these lower-priced categories have been impactful in driving sales growth throughout our history, so we have optimized our product mix and enhanced our merchandise offerings to reinvigorate this portion of our customer base. We expect to begin seeing margin improvements starting in the fiscal first quarter as the supply chain has begun to normalize, and we continue to remain vigilant in our efforts to tightly manage operating costs across the organization.”
