Kirkland's 2Q hurt by soft home market

JACKSON, Tenn. Kirkland's Inc. today reported that net sales for the 13-week period ended Aug. 4 were $87.4 million compared with $91 million for the 13-week period ended July 29, 2006. Comparable-store sales for the second quarter of fiscal 2007 decreased 10.5% compared with a 9% comparable-store sales decrease in the prior-year quarter. Comparable-store sales in mall stores declined 12.7% for the second quarter while comparable-store sales in off-mall stores declined 8.5%.

Net sales for the 26-week period ended Aug. 4 were $169.7 million compared with $183.6 million for the 26-week period ended July 29, 2006. Comparable-store sales for the 26 weeks ended Aug. 4 decreased 14.7% compared with a 7.1% decrease in the prior-year period. Comparable-store sales in mall stores declined 17% while comparable-store sales in off-mall stores declined 12.6%.

Robert Alderson, Kirkland's ceo, said, "The second quarter results continue to reflect the difficulty of operating in today's promotional environment in the home decor sector, but we were pleased with the year-over-year improvement in gross margin and the success of our Big Sale in July. Unfortunately, the weak trends in May and June were too much to overcome."

The company issued guidance for the third quarter ending Nov. 3, of a net loss of 24 cents to 29 cents per diluted share, compared with a net loss of 15 cents per diluted share in the prior-year period. Net sales are expected to be $89 million to $92 million, with a comparable-store sales decrease of 9% to 12% compared with net sales of $95.8 million and a comparable-store sales decrease of 6.7% in the prior-year period.