Kirkland's Posts Q3 Loss; CEO Takes Temporary Leave
NASHVILLE, Tenn.-Rising expenses brought specialty retailer Kirkland's to a net loss of $416,000 in its fiscal third quarter, compared with net income of $1.2 million in its third quarter of last year.
The company also said its president and CEO, Robert Alderson, would begin a temporary medical leave of absence on Nov. 26. Alderson, who will undergo what the company described as a non-emergency medical procedure, is expected to resume his duties after a recovery period of from six to eight weeks. Meanwhile, Mike Madden, senior vice president and chief financial officer, will serve as acting president and CEO in Alderson's absence.
Kirkland's third quarter, which ended on Oct. 27, saw increases in both cost of goods sold and operating expenses. The former cut gross margin in the quarter by 204 basis points to 35.2 percent. Operating expenses rose 1.1 percent in dollars and 49 basis points as a percentage of sales, to 32.7 percent.
Net sales slipped 0.4 percent to $96.7 million, and included a drop of 4.7 percent in same-store sales. Alderson said the results were in line with Kirkland's expectations for the quarter. "Although our outlook remains conservative and somewhat cautious due to limited visibility less than a month into the quarter, we are focused on maximizing fourth-quarter performance," he said. "As we approach fiscal 2013, our priorities for driving future sales and earnings results continue to be elevating our brand awareness, expanding our e-commerce business and improving our merchandising process and execution."