Kirkland’s Inc. (KIRK) recently posted surprisingly strong third-quarter earnings. The news was the engine of nearly 20 percent growth of KIRK shares on December 3 trading, which the company has so far succeeded to retain after ups and downs in the price till last session.
Kirkland’s revenue was $146.6 million in the third quarter, significantly above the expectations of analysts. Due to changing customer tastes in the midst of Covid-19, the company has seen strong demand for home products in recent months. The recovery in the real estate market, which also increased the demand for interior goods, was an additional growth factor. At the same time the business improved its operating costs, resulting in $0.66 in adjusted earnings per share. Kirkland’s was forecast to lose $0.3 per share by Wall Street analysts.
The pandemic has had a positive effect on the shopping operation of Kirkland, but after last year the positive momentum in the market of the company has been observed. At the same time, both in-store sales and the e-commerce market are increasingly evolving for the retailer.
Kirkland’s will continue to grow its direct sales business over the next few years. Plans are also under way to boost the supply chain’s productivity and reduce some costs, which would ultimately lead to an increase in gross margin metrics. By reducing the least profitable ones, Kirkland plans to optimize the number of stores. So the retailer plans to retain 300-350 stores in the coming years, compared to more than 380 currently.
Therefore, Kirkland’s shows the ability to adjust to tough situations, which can give the company good revenues during the economic recovery after Covid-19.
Kirkland’s Inc. (KIRK) stock was up 7.77 percent on Tuesday to conclude the trading at $18.31. Market capitalization of home goods retailer currently stands at about $257 million.