Kirkland’s, Inc. (NASDAQ: KIRK) Wants To Do What?


Kirkland’s, Inc. (NASDAQ: KIRK) said that 2Q2016 was so tough that it could not meet the performance expectation of Wall Street. The management of the company has gone ahead to cut performance outlook for 2016, saying that it expects the tough market conditions to persist in the back half of the year.

Nevertheless, the management appears upbeat on the long-term prospects of Kirkland’s, Inc. (NASDAQ:KIRK). There are a few areas that the management has identified that it will focus on in the balance of 2016 with hopes of driving long-term growth.

One such area is marketing. According to CEO Mike Madden, they are planning to launch a brand campaign this fall that will reinforce Kirkland’s marketing messaging. The campaign that Kirkland’s intends to roll out will target its messaging around issues such as value in deals, variety awareness, identity and style among others.

CEO Madden added that the campaign will aim to bring out the aspects of Kirkland’s, Inc. (NASDAQ:KIRK) that are differentiating and unique.

As Kirkland’s plans a more balance advertising campaign, the management also talked expanding the use of digital advertising channels. In the back half of 2016, Kirkland’s said that most of its advertisements will target mobile.

In addition to revamping its marketing campaigns through balanced messaging, Kirkland’s has also begun work on reviewing its loyalty program. As such, the company hopes to have in place a refresh loyalty program in 2017.

Cost curtailment – Kirkland’s, Inc. (NASDAQ: KIRK)

The other area that Kirkland’s, Inc. (NASDAQ: KIRK) is focusing its attention on is cost controls. The management believes that achieving greater internal efficiency will enable KIRK to post improving earnings despite challenging retail conditions.

Kirkland’s cost control measures are already bearing fruit as the company‚Äôs operating expenses declined as a percentage of sales in 2Q2016.

How KIRK fared in 2Q

Kirkland’s, Inc. (NASDAQ:KIRK) posted EPS loss of $0.22 on revenue of $123 million in 2Q2016. The figures fell short of consensus estimates that called for EPS loss of $0.21 on revenue of $125.54 million.

Comparable store sales fell 4.3%, compared to a growth of 6.7% in the same quarter last year. Kirkland’s closed 4 stores in 2Q and opened 13 stores in the quarter.

2016 outlook

Kirkland’s, Inc. (NASDAQ:KIRK) is looking for 2016 EPS in the band of $0.70 to $0.80. But consensus estimate calls for EPS of $0.99.


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