Wedbush Maintains Outperform following Kirkland's (KIRK) Q1 Results
Wedbush maintains an Outperform rating on Kirkland's (NASDAQ: KIRK), and raised the price target to $32.00 (from $30.00), following Q1 results. Analyst John Garret views KIRK as a serious competitor in home decor retail. The company declared a special one-time cash dividend of $1.50/shr.
Garret commented on KIRK, saying, "Despite headwinds from weather and ports, KIRK was able to drive upside to the quarter with Q1 adj. EPS of $0.16 vs. $0.12 LY, which was above the high end of guidance for $0.09-$0.12 and our/consensus $0.11; comps of +3.0% vs. +5.0% LY were at the high end of guidance for 2-3%. Gross margins rose 93 bps to 40.3%, driven by higher merchandise margin (46 bps), lower outbound freight costs (39 bps), and lower central distribution costs (6 bps). Expenses rose 12 bps as a percentage of sales as leverage of payroll and marketing were offset by corporate expenses (professional fees, stock com pensation expense, and the $0.02 charge related to the retirement of the former CEO). Q1 sales grew 9.3% to $118 million – in line with expectations."
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Shares of Kirkland's closed at $27.43 yesterday.