By Katherine Hamilton
Kirkland's shares fell after preliminary fourth-quarter profit and comparable sales declined and the company said it is closing some stores.
Shares fell 4.2% to $1.49, continuing a year-long slide that has now seen the stock lose almost half its value.
The retailer has been struggling with declining earnings but is aiming to capitalize on a recent deal with Beyond, owner of the Bed, Bath and Beyond brand, to bolster its furniture and home-decor sales.
Kirkland's on Tuesday shared preliminary earnings for its fourth quarter, which ended Feb. 1, showing more declines. It estimates it made a profit of $7.9 million, down from $10.1 million in the prior-year quarter. It also estimated net sales of about $148 million.
Nashville, Tenn.-based Kirkland's said about 6% of its stores do not meet its profitability standards. The company is closing some of those locations and converting others to different brands. Kirkland's operates 317 stores.
"As part of our ongoing transformation, we will continue to eliminate or convert underperforming assets to drive revenue growth and improve the profitability of the company," Chief Executive Amy Sullivan said.
E-commerce sales slid 7.9% in the fourth quarter, dragging down overall consolidated sales, which declined by 0.6% compared with the year before, according to Kirkland's preliminary estimates. The company said it has begun eliminating certain products that aren't profitable enough after the cost of shipping, handling and returns. Kirkland's also aims to work with Beyond to improve its online presence.
As part of a seven-year collaboration deal closed earlier in February, Beyond is investing $25 million in Kirkland's and now owns 40% of its outstanding common shares. Beyond is providing Kirkland's with $17 million in debt financing and receiving a collaboration fee of 0.25% of Kirkland's retail and e-commerce revenue starting in the first quarter of 2025.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
February 18, 2025 13:33 ET (18:33 GMT)
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