KIRKLAND'S, INC (KIRK) SEC Filing 10-Q Quarterly report for the period ending Saturday, November 3, 2018
Net sales increased 6.6% to $154.6 million
Comparable sales increased 1.4%; e-commerce revenue up 22.9%
Loss per diluted share of $0.18; adjusted loss per diluted share of $0.13 on improved EBITDA margin
Annual EPS guidance reaffirmed at $0.50 to $0.60, excluding new CEO charges
The following information was filed by KIRKLAND'S, INC on Thursday, November 29, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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- 18487863_18Financial - ExpenseCost of sales has various distinct components including: product cost of sales (including inbound freight, damages and inventory shrinkage), store occupancy costs (including rent and depreciation of leasehold improvements and other property and equipment), outbound freight costs (including e-commerce shipping) and central distribution costs (including operational costs and depreciation of leasehold improvements and other property and equipment).
- 18487863_47Financial - ExpenseThe decrease in the tax rate for the third quarter of fiscal 2018 compared to the prior-year quarter was primarily due to the effect of the U.S. Tax Cuts and Jobs Act, which reduced the U.S. federal corporate rate from 35% to 21% effective as of January 1, 2018, which was partially offset by additional tax expense related to stock compensation activity.
- 18487863_78Financial - ExpenseThe decrease in the tax rate for the first nine months of fiscal 2018 compared to the prior-year period was primarily due to the effect of the U.S. Tax Cuts and Jobs Act, which reduced the U.S. federal corporate rate from 35% to 21% effective as of January 1, 2018, which was partially offset by additional tax expense related to stock compensation activity.
- 18487863_149Revenue - ProductOur business is highly seasonal and our fourth quarter contributes a disproportionate amount of our net sales, net income and cash flow, and any factors negatively impacting us during our fourth quarter could reduce our net sales, net income and cash flow, leaving us with excess inventory and making it more difficult for us to finance our capital requirements.
- 18487863_132Other - OtherThe factors listed below under the heading "Risk Factors" and in the other sections of this Form 10-Q provide examples of risks, uncertainties and events that could cause our actual results to differ materially from the expectations expressed in our forward-looking statements.
- 18487863_44Revenue - ProductThe decrease as a percentage of net sales was primarily due to cost control initiatives and favorable self-insured workers? compensation and general liability claims trends.
- 18487863_75Revenue - ProductThe decrease as a percentage of net sales was primarily due to cost control initiatives and favorable self-insured workers? compensation and general liability claims trends.
- 18487863_62Revenue - ProductFor e-commerce, comparable sales benefited from an increase in transactions due to higher website traffic.
- 18487863_140Other - OtherWe may not be able to successfully respond to technological change, our website could become obsolete and our financial results and conditions could be adversely affected.
- 18487863_90Financial - ExpenseThe change in the amount of cash from operations as compared to the prior-year period was primarily due to timing of accrued expenses and other noncurrent liabilities and a decline in operating performance.
- 18487863_119Financial - Shares / EquityThe table below sets forth selected stock repurchase plan information (in thousands, except share amounts) for the periods indicated: As of November 3, 2018, we had approximately $9.0 million remaining under our new stock repurchase plan.
- 18487863_113Other - OtherOn August 22, 2017, we announced that our Board of Directors authorized a stock repurchase plan providing for the purchase in the aggregate of up to $10 million of our outstanding common stock.
- 18487863_115Other - OtherOn September 24, 2018, the Company announced that its Board of Directors authorized a new stock repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company?s outstanding common stock.
- 18487863_16Revenue - ProductIncreases in comparable store sales are an important factor in maintaining or increasing the profitability of existing stores.
- 18487863_103Financial - DebtBorrowings under the Credit Agreement are subject to certain conditions and contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and ERISA events.
- 18487863_134Other - OtherWe caution readers that the following important factors, among others, have in the past, in some cases, affected and could in the future affect our actual results of operations and cause our actual results to differ materially from the results expressed in any forward-looking statements made by us or on our behalf.
- 18487863_143Other - OtherOur results could be negatively impacted if our merchandise offering suffers a substantial impediment to its reputation due to real or perceived quality issues.
- 18487863_24Revenue - ProductThe impact of net new store growth contributed an increase in net sales of $7.6 million.
- 18487863_55Revenue - ProductThe impact of net new store growth contributed an increase in net sales of $22.6 million.
- 18487863_97Other - OtherNet cash used in financing activities was approximately $10.5 million for the first nine months of fiscal 2018 and was primarily related to the repurchase and retirement of common stock pursuant to our stock repurchase plan.
- 18487863_98Financial - Shares / EquityNet cash used in financing activities was approximately $166,000 for the first nine months of fiscal 2017 and was related to the repurchase and retirement of common stock pursuant to our stock repurchase plan and net share settlement of stock options and restricted stock, partially offset by employee stock purchases.
- 18487863_161Revenue - ProductWe depend on a number of vendors to supply our merchandise, and any delay in merchandise deliveries from certain vendors may lead to a decline in inventory which could result in a loss of net sales.
- 18487863_146Revenue - ProductWe are exposed to the risk of natural disasters, pandemic outbreaks, global political events, war and terrorism that could disrupt our business and result in lower sales, increased operating costs and capital expenditures.
- 18487863_118Financial - Shares / EquityThe stock repurchase plan does not require us to repurchase any specific number of shares, and we may terminate the repurchase plan at any time.
- 18487863_67Financial - ExpenseStore occupancy and depreciation costs increased approximately 90 basis points as a percentage of net sales, primarily due to a favorable $1.2 million one-time out-of-period adjustment of ancillary rent payments in the prior-year period and an unfavorable $0.7 million one-time out-of-period adjustment to deferred rent in the current period, as well as deleverage from negative comparable store sales.
- 18487863_34Financial - EarningsGross profit as a percentage of net sales decreased 120 basis points from 31.4% in the third quarter of fiscal 2017 to 30.2% in the third quarter of fiscal 2018.
- 18487863_65Financial - EarningsGross profit as a percentage of net sales decreased 150 basis points from 31.4% in the first nine months of fiscal 2017 to 29.9% in the first nine months of fiscal 2018.
- 18487863_9Revenue - GeographyThis combination of ever-changing and stylish merchandise, value pricing and a stimulating online and store experience has led to our emergence as a leader in home decor and enabled us to develop a strong customer base.
- 18487863_167Other - OtherThe market price for our common stock might be volatile and could result in a decline in the value of your investment.
- 18487863_26Revenue - ProductComparable store sales, including e-commerce sales, increased 0.7% in the prior-year period.
- 18487863_144Financial - Shares / EquityWe face an extremely competitive specialty retail business market, and such competition could result in a reduction of our prices and a loss of our market share.
- 18487863_39Financial - ExpenseCentral distribution costs, including depreciation, decreased 10 basis points as a percentage of net sales.
- 18487863_25Revenue - ProductThis was in addition to an increase in comparable store sales, including e-commerce sales, of 1.4%, or $2.0 million for the third quarter of fiscal 2018 compared to the prior-year period.
- 18487863_95Other - OtherWe expect that capital expenditures for fiscal 2018 will be in the range of $29 to $31 million, primarily for the purpose of leasehold improvements at new stores and investments in supply chain and omni-channel technologies.
- 18487863_4Other - OtherFactors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption "Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995" and under Part II, Item 1A - "Risk Factors".
- 18487863_163Revenue - ProductOur success is highly dependent on our planning and control processes and our supply chain, and any disruption in or failure to continue to improve these processes may result in a loss of net sales and net income.
- 18487863_166Other - OtherIf we fail to maintain an effective system of internal control, we may not be able to accurately report our financial results.
- 18487863_108Other - OtherAs of November 3, 2018, we were in compliance with the covenants in the Credit Agreement, and there were no outstanding borrowings under the credit facility, with approximately $75.0 million available for borrowing.
- 18487863_94Other - OtherCapital expenditures in the prior-year period related primarily to the opening of 26 new stores during the period, improvements to our supply chain and information technology systems, and investments in our existing stores.
- 18487863_23Revenue - ProductNet sales increased 6.6% to $154.6 million for the third quarter of fiscal 2018 compared to $145.0 million for the prior-year period.
- 18487863_54Revenue - ProductNet sales increased 5.2% to $430.9 million for the first nine months of fiscal 2018 compared to $409.5 million for the prior-year period.
- 18487863_12Revenue - ProductWe use comparable store sales to measure our ability to achieve sales increases from stores that have been open for at least 13 full fiscal months.
- 18487863_160Other - OtherOur hardware and software systems are vulnerable to damage that could harm our business.
- 18487863_154Legal - OtherNew legal requirements could adversely affect our operating results.
- 18487863_128Other - OtherForward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.
- 18487863_150Other - OtherFailure to control merchandise returns could negatively impact the business.
- 18487863_93Other - OtherThe capital expenditures in the current year period related primarily to the opening of 22 new stores during the period, investments in information technology systems, investments in our existing stores, hardware lease buyouts and improvements to our supply-chain.
- 18487863_38Financial - ExpenseOutbound freight costs, which include e-commerce shipping, increased approximately 20 basis points as a percentage of net sales, which was driven by an increase in e- commerce shipping costs due to the further expansion of this channel.
- 18487863_68Financial - ExpenseOutbound freight costs, which include e-commerce shipping, increased approximately 50 basis points as a percentage of net sales, which was driven by an increase in e-commerce shipping costs due to the further expansion of this channel.
- 18487863_159Other - OtherFailure to protect the integrity and security of individually identifiable data of our customers and employees could expose us to litigation and damage our reputation; the expansion of our e-commerce Business has inherent cybersecurity risks that may result in business disruptions.
- 18487863_148Financial - EarningsOur profitability is vulnerable to inflation and cost increases.
- 18487863_162Revenue - GeographyWe are dependent on foreign imports for a significant portion of our merchandise, and any changes in the trading relations and conditions between the United States and the relevant foreign countries may lead to a decline in inventory resulting in a decline in net sales, or an increase in the cost of sales resulting in reduced gross profit.
- 18487863_19Financial - ExpenseProduct and outbound freight costs are variable, while occupancy and central distribution costs are largely fixed.
- 18487863_164Other - OtherWe depend on key personnel, and, if we lose the services of any member of our senior management team and are unable to replace them with qualified individuals on a timely basis, we may not be able to run our business effectively.
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- Form Type: Quarterly
- Number of times amended: 0
- Accession Number: 0001056285-18-000086
- Submitted to the SEC: Thursday, December 6, 2018 4:25:31 PM EST
- Accepted by the SEC: Thursday, December 6, 2018
- Period ending: November 2018
- Industry: Retail Stores