Kirkland’s Inc. (NASDAQ: KIRK) missed market estimates for revenue and earnings in the second quarter of 2019. Analysts had forecast a loss of $0.67 per share on revenue of $126 million. Shares plummeted over 11% in premarket hours on Thursday.
On a GAAP basis, the company reported a net loss of $17.1 million, or $1.21 per share, versus $6.7 million, or $0.43 per share, last year. Adjusted net loss was $14.9 million, or $1.05 per share.
Net sales fell 10.5% year-over-year to $119.9 million. Comparable store sales, including e-commerce sales, decreased 11.2% compared to a decrease of 3.9% in the prior-year quarter.
The comp stores sales decline was driven by a drop in store sales, partly offset by a growth in ecommerce sales. Store sales were hurt by negative store traffic and a decline in average ticket, partly offset by an improvement in conversion. Gains in traffic and conversion helped drive a 22% growth in ecommerce sales but were partly offset by a drop in average ticket.
During the quarter, Kirkland’s faced challenges due to shifts in shopping patterns of customers and saw double-digit declines in store traffic which in turn weighed on margins. The company expects near-term financial results to be impacted by higher promotional and marketing activity to drive traffic and bring in new customers.
Kirkland’s opened one store and closed one store during the quarter, bringing the total number of stores to 431 at quarter-end.
For fiscal 2019, the company expects net loss to range from $1.25 to $1.50 per share.
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