Home goods retailer misses in Q2

Kirkland’s reported a second-quarter loss that was larger than expected as it lowered its outlook for the year.



The home goods retailer lost $3.6 million in the quarter ended July 30, compared with a loss of $2.3 million in the year-ago period.



Net sales for the quarter increased 6.7% to $123.0 million. Same-store sales, including e-commerce sales, decreased 4.3%.



“Traffic remains under pressure as we enter the second half and we've adjusted our full-year guidance to incorporate a more conservative outlook," said Mike Madden, CEO, Kirkland’s. "Our seasonal merchandise is performing well thus far and we have planned deeper buys in categories that are trending favorably. Our fall marketing campaign reflects a better balance of value and inspiration, and we're making improvements to our omnichannel delivery and execution.”



Kirkland's opened 13 stores and closed 4 stores during the second quarter, giving it a total of 391 locations at quarter end. It is on track to open 40 to 42 new stores for the year.



The retailer said it expects its gross profit margin to decline year-over-year given an increase in supply chain and store occupancy costs, slightly offset by a higher merchandise margin. Operating expenses are expected to increase slightly as a percent of sales. Kirkland’s expects fiscal 2016 earnings per share to be in the range of $0.70 to $0.80.