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Kirkland's Reports Second Quarter 2021 Results , Remains Well On Track Towards Long - Term Financial Goals Release : 9/2/2021 7:00:00 AM - Introduces Second Half 2021 Outlook of Mid - Single - Digit Same - Store Sales Increase and Year - Over - Year Earnings Growth - - Updates Financial Targets , Highlighting Confidence in the Execution of Key Strategic Initiatives - - Issues New Share Repurchase Authorization for $ 20 Million - NASHVILLE , Tenn . , Sept. 2 , 2021 / PRNewswire / -- Kirkland's , Inc. ( Nasdaq : KIRK ) ( " Kirkland's " or the " Company " ) , a specialty retailer of home décor and furnishings , announced financial results for the 13 and 26 - week periods ended July 31 , 2021 . Second Quarter 2021 Financial Summary vs. Same Year - Ago Quarter • Net sales decreased 8.0 % to $ 114.8 million , with 4.5 % fewer stores • Comparable sales decreased 5.2 % , including an e - commerce decrease of 12.6 % • Gross profit margin increased 600 basis points to 34.6 % • Earnings per diluted share increased to $ 0.04 compared to a loss per diluted share of $ 0.66 • Adjusted loss per diluted share was $ 0.01 compared to an adjusted earnings per diluted share of $ 0.02 • EBITDA increased significantly to $ 5.4 million compared to $ 0.6 million • Adjusted EBITDA was $ 5.1 million , compared to $ 6.8 million ● Operating income increased to $ 0.2 million compared to an operating loss of $ 5.3 million • Cash balance of $ 45.2 million with no outstanding debt ; total liquidity of $ 110.3 million • Share repurchases of $ 12.0 million in the quarter • Store count at quarter end was 369 stores , with one store closure Management Commentary " The second quarter proved to be another step forward in our transformation efforts and achieving our long - term financial targets , " said Steve " Woody " Woodward , president and CEO of Kirkland's . " Despite the expected challenges stemming from continued constraints in the global supply chain , we made progress in the areas that we could control and experienced an improvement in sales during the last month of the quarter with year - over - year margin gains as a result of our disciplined approach to our cost structure . This included elevating our merchandising assortment to drive higher average ticket , continuing to increase our levels of direct sourcing and further negotiating rent reductions across our store footprint . These enhancements drove a two - year comparable same - store sales increase of approximately 5 % compared to the same period in pre - pandemic 2019. In addition , our positive operating income and earnings during our seasonally softest quarter are a testament to these accomplishments and others as we work towards consistent profitability in all four quarters . " Entering into our historically strongest seasons , harvest and Christmas , our team will continue to closely monitor our inventory position and do everything we can to meet customer demand . Although we believe some level of supply chain constraints will persist , we still expect to deliver strong same - store sales growth in the range of mid - single - digits for the second half of the year . We also remain steadfast in executing upon our overall transformation strategy . We've been hard at work further optimizing our merchandising assortment , stabilizing margins and driving profitable growth with an overarching goal to become a high - performance specialty home furnishing retailer with quality products at affordable price points . With a strong financial position and an efficient infrastructure in place , I have the utmost confidence in our ability to achieve our goals and drive shareholder value . " New Share Repurchase Authorization Kirkland's also announced today that its board of directors has authorized a new share repurchase plan providing for the purchase in the aggregate of $ 20 million of the Company's outstanding common stock . Repurchases of shares will be made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions . The amount and timing of repurchases will be based on a variety of factors , including stock price , regulatory limitations and other market and economic factors . The share repurchase plan does not require the Company to repurchase any specific number of shares , and the Company may terminate the repurchase plan at any time . Second Half of 2021 Outlook For the second half of fiscal 2021 , the Company expects to achieve a mid - single - digit same - store sales increase , primarily driven by better inventory positions in key categories and continued growth in average ticket . In addition , the Company anticipates year - over - year earnings growth despite absorbing significant incremental freight costs . Strategic Initiatives and Financial Targets Kirkland's key strategic initiatives include : • Accelerating product development to reinforce quality and relevancy as the Company continues its transformation into a specialty retailer where customers are able to furnish their entire home on a budget ; • Bolstering its omni - channel strategy via website enhancements , more focused marketing spend , an expanded online assortment , and an improved in - store experience ; • Improving the customer experience with the Company's re - launched loyalty program , extended credit options and broadened delivery options ; and • Utilizing its leaner infrastructure to be nimbler to changes in consumer preference and buying behaviors . Kirkland's annual financial targets include : • Comparable sales growth , driven by e - commerce , merchandise improvements and brick - and - mortar store productivity . The Company expects e - commerce to continue to grow as a percent of its total business to over 50 % of sales . The Company also intends to focus on improving the contribution of its remaining store base , which is an integral part of its omni - channel strategy and supports improved profitability of its e - commerce sales . • Increasing gross margin by continuing with the Company's current discipline of limited promotional offers , expanding direct sourcing , improving supply chain efficiency and reducing occupancy costs . With improved merchandise quality and to support a better customer experience , the Company will continue to move towards more targeted promotions . Direct sourcing is expected to increase from approximately 20 % of purchases in 2020 to 70 % by 2025. With these improvements , continued efficiencies in the Company's supply chain and lower occupancy costs , Kirkland's goal is to improve its annual gross profit margin to a mid - to - high 30 % range over the next one - to - two years . • Improving profitability by leveraging the leaner infrastructure with comparable sales growth . The Company believes its ideal store count should be approximately 350 stores with additional opportunities for more favorable rent terms during ongoing lease renewals . With approximately $ 45 million in annualized operating expenses eliminated from the business in 2020 , the Company expects annual EBITDA as a percent of sales to be in the low - to - mid double - digit range in the next one - to - two years and annual operating income as a percentage of sales to be in the high - single - digit range in the next one - to two years . • Maintaining adequate liquidity and generating free cash flow while continuing to invest in key strategic initiatives and returning excess cash to Kirkland's shareholders .