Kirkland's (KIRK) saw its loss widen to $0.85 million, or $0.05 a share for the quarter ended Oct. 29, 2016. In the previous year period, the company reported a loss of $0.27 million, or $0.02 a share. Revenue during the quarter grew 6.97 percent to $138.24 million from $129.24 million in the previous year period. Gross margin for the quarter contracted 70 basis points over the previous year period to 36.51 percent. Operating margin for the quarter stood at negative 1.16 percent as compared to a negative 0.72 percent for the previous year period.
Operating loss for the quarter was $1.61 million, compared with an operating loss of $0.93 million in the previous year period.
“We were pleased with the modest improvement in merchandise margin for the quarter despite a decline in traffic in a highly promotional environment. Our inventory levels are much improved and in good shape as we approach the holiday season,” said Mike Madden, President and Chief Executive Officer. “Conversion was positive in both the store and e-commerce channels, and our seasonal assortment is performing well.”
For financial year 2016, the company projects diluted earnings per share to be in the range of $0.70 to $0.75.
Operating cash flow turns positive
Kirkland's has generated cash of $12.14 million from operating activities during the nine month period as against cash outgo of $8.58 million in the last year period. The company has spent $28.06 million cash to meet investing activities during the nine month period as against cash outgo of $25.72 million in the last year period.
The company has spent $0.17 million cash to carry out financing activities during the nine month period as against cash outgo of $32.48 million in the last year period.
Cash and cash equivalents stood at $28.26 million as on Oct. 29, 2016, down 12.66 percent or $4.10 million from $32.36 million on Oct. 31, 2015.
Working capital decreases marginally
Kirkland's has witnessed a decline in the working capital over the last year. It stood at $65.37 million as at Oct. 29, 2016, down 4.59 percent or $3.14 million from $68.51 million on Oct. 31, 2015. Current ratio was at 1.79 as on Oct. 29, 2016, down from 1.85 on Oct. 31, 2015.
Days inventory outstanding has decreased to 52 days for the quarter compared with 90 days for the previous year period. At the same time, days payable outstanding went down to 42 days for the quarter from 46 for the same period last year.
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