Garden Accessories | Kirkland’s Reports Second Quarter Results
NASHVILLE, Tenn., Aug 19, 2011 (BUSINESS WIRE) –Kirkland’s, Inc. KIRK -0.77% today reported financial results for the 13-week and 26-week periods ended July 30, 2011.
Net sales for the 13-week period ended July 30, 2011, were $89.7 million compared with $89.5 million for the 13-week period ended July 31, 2010. Comparable store sales for the second quarter of fiscal 2011 decreased 8.0% compared with a 1.0% increase in the prior-year quarter. The Company opened 7 stores and closed 6 stores during the second quarter of 2011, bringing the total number of stores to 294 as of quarter’s end.
Net sales for the 26-week period ended July 30, 2011, were $184.1 million compared with $183.0 million for the 26-week period ended July 31, 2010. Comparable store sales for the 26 weeks ended July 30, 2011, decreased 8.2% compared with an increase of 6.6% in the prior-year period. The Company opened 10 stores and closed 16 stores during the 26-week period.
The Company reported a net loss of $0.5 million, or $0.02 per diluted share, for the second quarter of fiscal 2011 compared with net income of $3.3 million, or $0.16 per diluted share, for the second quarter of fiscal 2010.
For the 26-week period ended July 30, 2011, the Company reported net income of $2.7 million, or $0.13 per diluted share, compared with net income of $9.8 million, or $0.47 per diluted share, for the 26-week period ended July 31, 2010.
Robert Alderson, Kirkland’s President and Chief Executive Officer, said, “Our second quarter sales and margin results were less than we had expected. A more aggressive than planned markdown cadence was necessary throughout the quarter to keep our inventories well-positioned as we entered the second half of the year. We continue to focus on new merchandise initiatives, but expect the third quarter to look much like the second quarter should current trends continue.
“Recent economic tumult may further impact consumer sentiment and spending in the back half, but we are financially well-positioned to continue our controlled growth and weather an uncertain economic environment. Our Board’s decision to commence a stock repurchase program and the agreement to renew our $50 million credit facility signal our confidence in the future of Kirkland’s.”
Stock Repurchase Authorization of $40 Million
The Board of Directors has authorized a stock repurchase plan providing for the purchase in the aggregate of up to $40 million of the Company’s outstanding common stock over the next 18 months. The shares may be repurchased from time to time in open market or negotiated transactions, and the amount and timing of those purchases will be based on a variety of factors, including stock acquisition price, regulatory limitations and other market and economic factors. The stock repurchase program does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase program at any time. As of July 30, 2011, the Company had 20.2 million common shares outstanding.
$50 Million Senior Secured Credit Facility
The Company also announced that it has agreed to renew its $50 million senior secured credit facility led by Bank of America, N.A., as administrative agent. The facility will mature in August 2016 and will bear interest at an annual rate equal to LIBOR plus a margin ranging from 175 to 225 basis points with no LIBOR floor and no financial maintenance covenants.
Fiscal 2011 Outlook
At quarter end, the Company had 294 stores compared with 300 at the beginning of 2011 and 286 at the end of the prior-year period. For fiscal 2011, the Company now expects to open approximately 15-20 net new stores, representing square footage growth of 9% to 12%. New store opening activity will be heavily weighted toward the second half of the year. Store closings will typically coincide with replacement store
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