Kirkland's (KIRK) Misses Q3 EPS by 12c; Comps Fell 2.3%; Names New COO

November 22, 2016 6:33 AM EST
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Kirkland's (NASDAQ: KIRK) reported Q3 EPS of ($0.22), $0.12 worse than the analyst estimate of ($0.10). Revenue for the quarter came in at $138.2 million versus the consensus estimate of $137.5 million.

Comparable store sales for the third quarter of fiscal 2016, including e-commerce sales, decreased 2.3% compared with an increase of 1.8% in the prior-year quarter. Kirkland's opened 11 stores and closed one during the third quarter of 2016, bringing the total number of stores to 401 at quarter end.

Executive Changes:

Kirkland's is strengthening its senior leadership team to support its ongoing strategy to transform Kirkland's into a high-performing, nationally recognized home décor brand of choice.

Mike Cairnes has been named Executive Vice President and Chief Operating Officer, a new position, effective November 28, 2016. Mr. Cairnes brings 25 years of experience in home décor retailing and manufacturing to Kirkland's and will focus on improving execution and consistency across the organization. In his role as COO, Mr. Cairnes will be responsible for day-to-day operations, overseeing marketing/e-commerce, merchandising, planning & allocation, store and supply chain operations. Mr. Cairnes was most recently with Michael's Stores, where he served concurrently as President of its Aaron's Brothers retail business, since 2015, and President of its Artistree framing business, since 2007. Prior to Michael's, Mr. Cairnes held senior leadership positions at Brushstrokes, a publisher of art canvases, and Larson-Juhl, a manufacturer of home décor products. He also has served as a board and strategy advisor to Bain Capital and Blackstone.

"We're delighted to have Mike join the Kirkland's team," said Mike Madden, President and Chief Executive Officer. "He has an accomplished track record of operational excellence, driving meaningful financial improvement and managing change across a wide range of retail and manufacturing businesses. Mike's a great cultural fit and will play a key role in helping us shape our vision and drive our strategic priorities."

In addition, Sarah Hussey recently joined Kirkland's as Vice President of Planning and Allocation. Prior to joining Kirkland's in the third quarter of 2016, Ms. Hussey worked in similar roles at Sports Authority, since 2000, and held merchandising roles at both Macy's and Hess's Department Stores.

"These additions are an important step in our ongoing efforts to better position Kirkland's to achieve our long-term growth objectives," continued Mr. Madden. "While the industry faces challenges, we believe we have a differentiated concept with a unique opportunity to grow sales and profit as we improve our operational execution, expand our branding efforts and omni-channel experience, and focus on new ways to better serve our customers."

GUIDANCE:

Kirkland's sees FY2016 EPS of $0.70-$0.75, versus the consensus of $0.73.

Total sales for fiscal 2016 are expected to increase approximately 7% compared with fiscal 2015, driven primarily by new store openings. This level of sales performance implies a fourth quarter comparable store sales decrease of 1% to 2%.

For earnings history and earnings-related data on Kirkland's (KIRK) click here.



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