Weak traffic trend hits Kirkland's

The CEO of Kirkland's blamed disappointing third quarter sales on traffic problems that he expects to persist into the fourth quarter despite the busy holiday season ahead.



The Tennessee-based home decor retailer reported a decrease in same store sales and income for the third quarter ended Oct. 31 compared with the prior year quarter. Same store sales increased 1.8%, compared with an increase of 6.3% in the prior-year quarter. Net income was a loss of $0.3 million, or 2 cents per diluted share, compared with net income of $1.3 million, or 7 cents per diluted share, for the 13 weeks ended Nov. 1, 2014.



"While our fall seasonal merchandise performed well and e-commerce revenues exceeded our expectations, we were disappointed with our third quarter results. Comparable sales were impacted by soft traffic including weakness in Texas, where we have our highest concentration of stores," said Mike Madden, Kirkland's president and CEO, said. "Our revised guidance assumes traffic challenges persist."



Looking ahead, Kirkland's now expects adjusted fourth quarter earnings per diluted share to be in the range of 89 cents to 96 cents. Same store sales will be flat to up to 2%.



Kirkland's opened 21 stores and closed two during the third quarter of 2015, bringing the total number of stores to 370 at quarter end.



Madden added: "The bulk of the holiday selling season is ahead of us and we believe we have a strong and engaging holiday assortment as evidenced by our continued strength in conversion. We're also encouraged by the performance of our 2015 class of stores and will enter Thanksgiving with 11% more stores open versus last year."



Kirkland's, Inc. currently operates 379 stores in 35 states.