US home décor and furnishing retailer Kirkland's has reported a decrease in net sales to $114.4m in the third quarter of the fiscal year 2024 (FY24) - a 1.7% drop from $116.4m in the same period of the previous year.
The company experienced a 3% decline in comparable sales, including a significant 14.9% fall in e-commerce sales, despite a 1.6% increase in comparable store sales.
The reduction in consolidated average ticket and e-commerce conversion primarily drove the decrease, though this was somewhat mitigated by an increase in overall traffic and store conversion rates.
The company noted that its comparable sales were adversely affected by 1% due to hurricane disruptions impacting many of its stores.
For the 13 weeks ending 2 November 2024, Kirkland's reported a net loss of $7.7m, or $0.59 per diluted share.
This compares to the net loss of $6.4m, or $0.50 per diluted share, recorded in the same quarter of the previous year.
However, gross profit improved to $32.1m or 28.1% of net sales in Q3 FY24, up from $30.7m or 26.3% of net sales year-on-year.
This improvement was largely due to reduced distribution centre and outbound freight costs, despite being partially offset by higher store occupancy costs and lower merchandise margins.
Kirkland's saw its operating expenses decline to $34.5m or 30.2% of net sales, down from $37.3m or 32.0% of net sales in the prior year's quarter, thanks to lower advertising costs, corporate salaries and asset impairment expenses.
Driven by lower operating expenses and an enhanced gross profit margin, the operating loss for Q3 FY24 was $2.4m, showing improvement from an operating loss of $6.7m in the same quarter of the previous year.
Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter showed a loss of $0.1m compared to a loss of $3.6m in Q3 FY23.
Kirkland's CEO Amy Sullivan said: "The third quarter marked our fourth consecutive quarter of positive comparable store sales growth and significant year-on-year improvement in adjusted EBITDA.
“I am immensely proud of our team's ability to deliver progress towards our initiatives of re-engaging our core customer, refocusing our product assortment and strengthening our omni-channel capabilities while we continued to conservatively deploy capital based on our near-term financial priorities."
In October 2024, Kirkland’s formed a strategic partnership with Beyond, the owner of the Bed Bath & Beyond brand, to revitalise the brand to drive sustainable, profitable growth by harnessing the core strengths of both companies.
