Kirkland's, Inc., a specialty retailer of home décor and furnishings, reported its financial results for the 26-week period ending August 3, 2024. The company experienced a decline in net sales, totaling $178.0 million, down 4.5% from $186.4 million in the same period of the previous year. Comparable sales decreased by 2.6%, with e-commerce sales dropping 15.1%, while store sales saw a modest increase of 2.3%.

Despite the decline in sales, Kirkland's reported an improvement in profitability metrics. The gross profit for the 26-week period was $44.7 million, yielding a gross profit margin of 25.1%, an increase from 23.2% in the prior year. Total operating expenses decreased by 8.6% to $65.6 million, contributing to a reduced operating loss of $20.8 million, compared to a loss of $28.4 million in the previous year. The net loss for the period was $23.3 million, a significant improvement from the $31.5 million loss reported in the same period last year.

The company implemented cost reduction initiatives during the second quarter of fiscal 2024, targeting approximately $6 million in savings from corporate overhead, store payroll, marketing, and technology expenses. These efforts are expected to yield ongoing annual pre-tax savings of around $7 million. Kirkland's also engaged an investment banking firm to explore strategic opportunities, although no specific timeline for this review has been established.

As of August 3, 2024, Kirkland's had total assets of $266.2 million, with total current assets at $105.4 million. The company reported long-term debt of $61.4 million, a significant increase from $34.0 million in the previous quarter. Total shareholders' equity showed a deficit of $19.7 million, worsening from a positive equity of $3.1 million earlier in the year.

Cash and cash equivalents stood at $4.5 million, a slight decrease from $4.9 million at the end of the previous fiscal year. The company reported net cash used in operating activities of $26.4 million, an improvement from $28.5 million in the prior year. Kirkland's has not repurchased any shares under its $30 million share repurchase plan, with approximately $26.3 million remaining as of the reporting date.

Kirkland's continues to navigate a challenging macroeconomic environment characterized by inflation and reduced consumer spending, which have impacted its performance and liquidity. The company remains focused on executing its financial turnaround strategy while managing operational costs effectively.