Home Furnisher Kirkland's Battered in Q1

JACKSON, TN-Kirkland’s management knew the company was in trouble and advised the world beforehand. But, that did not seem to make early FY 2007 numbers any easier to deliver during a Friday conference call, as officials of the home décor chain recited sharp sales declines and other harsh financial details for the 13-week period ending May 5th. Revenue dropped year-over-year from $92.6 million in Q1 2006 to $82.3 million, and comparable sales at 156 mall-based stores plunged by 20%. The 191 non-mall units did not fare much better, tailing off by 16.8%.

“Our team is obviously very disappointed with the first-quarter results,” president and COO Catherine David remarked, bemoaning that leadership “took our eye off the ball” and failed to deliver on presentation, price and product. Kirkland’s posted a net loss of $7.5 million, or 38 cents per share, more than double the $3 million loss (18 cents per share) registered a year earlier.

Store traffic was so weak that management advised analysts of the torpid start during a mid-March conference call. “I think we were pretty much on target with the severity of the trend described,” said David on Friday. CEO Robert Alderson was equally blunt, offering that, “we have some big challenges ahead” that he anticipates will not be overtaken by mid-year.