Kirkland's Posts Loss in Second Quarter
NASHVILLE, Tenn.-Higher expenses and reduced margins combined to produce a net loss of $480,000 for Kirkland's in its fiscal second quarter.
Gross margin finished the quarter, which ended on July 30, at 34.4 percent, 451 basis points off last year's second quarter. Robert Alderson, Kirkland's president and CEO, said margins were cut due to aggressive markdowns, which he said were necessary to keep its inventories positioned for the second half of the fiscal year. Selling, general and administrative expenses rose 7.9 percent in dollar terms and 229 basis points as a percentage of sales, to 32.1 percent.
Sales rose by just 0.2 percent to $89.7 million. Alderson said Kirkland's is focusing on new merchandise initiatives, but added that the third quarter will look much like the second quarter if current trends continue.
"Recent economic tumult may further impact consumer sentiment and spending in the back half," he said, "but we are financially well positioned to continue our controlled growth and weather an uncertain economic environment."