Kirkland’s Home (NASDAQ: NASDAQ:KIRK) CEO, Amy Sullivan, provided an overview of the company’s performance in the first quarter ended May 4, 2024. Despite a challenging industry environment that led to a 3.5% decrease in total comparable sales, Kirkland’s saw a 2.8% increase in comparable store sales. This was attributed to effective marketing and merchandising strategies. The company also reported a $1.3 million improvement in adjusted EBITDA over the previous year and is on track to achieve $6 million in expense savings within the fiscal year. Kirkland’s is working with financial advisor Consensus to explore strategic opportunities and is focused on returning to a mid- to high single-digit adjusted EBITDA margin range.

Key Takeaways

• Total comparable sales decreased by 3.5%, while comparable store sales increased by 2.8%.
• Adjusted EBITDA improved by $1.3 million compared to the previous year.
• Kirkland’s expects to deliver $6 million in expense savings within the fiscal year.
• The company is exploring strategic opportunities with the help of Consensus.
• Merchandise margin increased due to higher-margin sales and lower outbound freight costs.
• Kirkland’s aims for a positive adjusted EBITDA in 2024 and a long-term revenue goal of $600 million by fiscal 2028.
• Plans are in place to invest in e-commerce technology and targeted store openings and relocations.

Company Outlook

• Kirkland’s anticipates improvement in sales leading up to the holiday season.
• Focus on promotional effectiveness and inventory clearance.
• Long-term goal to reach $600 million in revenue by the end of fiscal 2028.
• Commitment to returning to positive cash flow and reducing borrowings.

Bearish Highlights

• Store occupancy costs increased due to a decline in sales.
• Challenges in ocean shipping rates may pose future obstacles.