Kirkland’s names new CEO as sales accelerate
It was a happy holiday in the home décor category and Kirkland’s is celebrating with the appointment of a new CEO and an elevated profit forecast.
The Nashville-based operator of 344 stores named Mike Madden CEO to succeed Robert Alderson. The seeds of the transition were planted last August when Madden was elevated to the role of president and COO after serving as senior vice president and CFO since 2008. Madden joined Kirkland’s in 2000 and held several senior roles in the finance area. While Alderson is stepping down as CEO in a few days, he will remain on the company’s board which is being expanded to accommodate the addition of Madden.
"The transition we've finalized today caps a period of tremendous progress for Kirkland's and sets our organization on a clear course for profitable growth as we expand our store and e-commerce channels,” said Wilson Orr, Kirkland’s chairman. “Our strong momentum to end 2014 - marked by record sales and increased earnings guidance - is a tangible outcome of investments to fortify our technology and deepen our team. None of this would have been possible without (Robert Alerson’s) exemplary leadership, and we're pleased he will continue to serve on the board.”
The changeover is senior leadership follows a successful holiday season in which Kirkland’s sales for the fourth quarter ended Jan. 31 increased 14.5% to $178.7 million and same store sales increased 8.2%.
Full year sales increased 10.2% to $507.6 million and same store sales increased 6.1%. The topline was aided by the addition of 34 new stores during the year, 11 of which opened during the fourth quarter. Based on the sales results, Kirkland's increased its guidance for the fourth quarter to a range of 84 cents to 87 cents a share from prior guidance of 77 cents to 84 cents. The company now expects full year earnings in the range of 97 cents to $1 per share compared to prior guidance of 90 cents to 97 cents.
“The foundational investments we have made over the last several years are driving improvement across our organization,” said newly appointed CEO Madden. “Sales in 2014 benefitted from a healthy combination of brick and mortar and e-commerce gains, and our margins improved from year-ago levels. We're confident we can build on our progress and expect the complexion of our earnings to begin to evolve. Our merchandise margin should continue to benefit from our investments in technology, yet we expect a greater contribution from expense leverage as we execute on our growth plan.”
As a result, Kirkland’s is eyeing earnings growth in the range of 15% to 20% in 2015.