Kirkland’s, Inc., struggled in the second quarter of fiscal 2021, watching net sales and comparable sales dip, but the company remains confident it has the infrastructure in place to achieve its long-term financial goals.
Net sales dropped 8% to just under $115 million in the three months ending July 31, compared to the same time a year earlier, in part because Kirkland’s has 4.5% fewer stores than at this point last year. Comparable sales were down 5% in the second quarter, including a nearly 13% dip in the company’s eCommerce business. Kirkland’s closed one store in the second quarter and ended July with 369 stores in total.
“The second quarter proved to be another step forward in our transformation efforts and achieving our long-term financial targets,” Kirkland’s President and CEO Steve Woodward said in the company announcement.
“Despite the expected challenges stemming from continued constraints in the global supply chain, we made progress in the areas that we could control and experienced an improvement in sales during the last month of the quarter with year-over-year margin gains as a result of our disciplined approach to our cost structure,” he said.
That includes elevating Kirkland’s merchandising assortment to drive higher average customer tickets, continuing to increase its direct sourcing and rent reductions negotiations for all stores. Those changes helped Kirkland’s achieve a 5% jump in same-store sales compared to the same time in 2019.
“In addition, our positive operating income and earnings during our seasonally softest quarter are a testament to these accomplishments and others as we work towards consistent profitability in all four quarters,” Woodward said.
“Entering into our historically strongest seasons, harvest and Christmas, our team will continue to closely monitor our inventory position and do everything we can to meet customer demand,” he said. “Although we believe some level of supply chain constraints will persist, we still expect to deliver strong same-store sales growth in the range of mid-single-digits for the second half of the year.”
Kirkland’s stores sell furniture, holiday décor, wall décor, textiles, art, decorative accessories, mirrors, art, fragrances and other products.