Kirkland's Stock Gains On 2H Forecast, Hopes On Leaner Infrastructure

Kirkland's Inc KIRK reported a second-quarter FY21 sales decline of 8% year-on-year, to $114.79 million, missing the analyst consensus of $115.65 million.
Comparable sales fell 5.2%, including an e-commerce decrease of 12.6%. Two-year comparable same-store sales increased 5%.
Gross profit margin increased 600 basis points Y/Y to 34.6%.
The operating margin was 0.2%, and operating income for the quarter was $0.22 million.
The company held $45.2 million in cash and equivalents as of July 31, 2021.
Adjusted EBITDA of $5.1 million declined 25% Y/Y.
Adjusted EPS of $(0.01) beat the analyst consensus of $(0.05).
Kirkland's board authorized a new share repurchase plan of $20 million of common stock.
With 369 stores at quarter-end, Kirkland believes its ideal store count should be approximately 350 stores.
It targets improving profitability by leveraging the leaner infrastructure with comparable sales growth.
Outlook: Kirkland's expects to achieve a mid-single-digit same-store sales increase in 2H.
In addition, the company anticipates earnings growth in 2H despite high freight costs.
Kirkland's goal is to improve its annual gross profit margin to a mid-to-high 30% range over the next one to two years.
Price Action: KIRK shares are trading higher by 14.29% at $20.87 on the last check Thursday.

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