Despite a slight decline in sales over the fiscal year ending Jan. 31, to $391.3 million, Kirkland's posted net income of $9.3 million for 2008 after having lost $25.9 million in 2007. Fourth-quarter net income totaled $15 million, compared to only $1.5 million a year earlier, while sales were off only 3% at $133.6 million.
"Our goal for the year was to show improvement in every quarter, and we more than exceeded that target," Robert Alderson, Kirkland's president and CEO, stated in a release. He added that he is "encouraged" by sales and margin trends so far in its current fiscal quarter, ending April 30.
Kirkland's, which has 295 locations in 34 states, closed 36 stores during fiscal 2008 and expects to close as many this year. New store openings are expected to be between 15 and 20 this year, mostly in the second half. Comparable store sales were 4% higher for the year, with indoor mall stores trending higher than standalone locations.
"The decisions many retailers are being forced to make in today's economy related to paring unproductive stores, renegotiating leases and cutting overhead costs were already made or under way at Kirkland's over the last 16 months," Alderson said. "With solid momentum and the merchandise reconnection we have made with our core customers, we believe we are in the unique position of pursuing a disciplined strategy with respect to new store openings."
Alderson added that Kirkland's is well positioned to respond to economic conditions in the coming year, including positive cash flow with no borrowings, and is confident that it has the right type of value-priced items in its stores. New store openings this year will mainly focus on replacing closing mall stores and additions to core geographic areas, he said.
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