Kirkland's expansion plan still on track

Kirkland’s Inc. says it is still on track to open as many as 40 new stores in 2015 after reporting solid financial results in its latest quarter.

The company’s net income increased 23% to $2.53 million, from $2.05 million a year earlier. Growth in cost of sales and operating expenses lagged the rate of revenue growth, boosting net income. Net sales rose 9% to $118.31 million, from $108.25 million. Same store sales, including e-commerce sales, grew 3%.

“We're pleased with our sales and earnings growth for the quarter. Sales came in at the top end of our guidance range, and earnings exceeded our expectations driven by strong merchandise margins and expense leverage in stores and e-commerce,” said Mike Madden, president and CEO. “Weather and the West Coast port delays presented challenges in the quarter, but our teams executed extremely well."

Kirkland’s plans to open 35 to 40 new stores and close 10 to 15 stores in fiscal 2015. New store openings are expected to be weighted toward the second and third quarters of the year, and store closings are expected to be spread evenly throughout the year.

"We are encouraged by the current momentum in the business," continued Mr. Madden. "Customer reaction to our assortments has been positive as indicated by strong conversion, and our real estate plans remain on track for the second half of the year. Our long-term confidence in the business is underscored by the announcement of a $1.50 per-share special dividend, made in a separate release this morning."

Total sales for fiscal 2015 are expected to increase approximately 10% to 12%, with a same-store sales increase of approximately 3% to 5%.

Kirkland’s currently operates 342 stores in 35 states.