Kirkland’s holiday sales disappoint, but furniture remains a ‘positive performer’

NASHVILLE, Tenn. — Despite “consistent positive performance” from its furniture business, a poorer-than-expected holiday season is causing Kirkland’s Inc. to adjust its year-end balance sheet to reflect increased inventory and higher net borrowing.

The company reported comp sales for the fiscal fourth quarter through December were down 5.5% compared with the prior-year period. This includes flat comp sales for November and an 11% decrease for December vs. 2021.

With the larger-than-anticipated December sales decline, Kirkland’s Home, which operates 355 home décor and furnishings stores in 35 states, expected to end the fiscal year now with $15 million to $17 million in net borrowings as well as inventory at the higher end of the $70 million to $80 million range.

Despite accelerating promotions in December to increase sales, President and CEO Steve Woodward said, “We were unable to overcome the impact from the decline in traffic and the effect on our merchandise mix of an extended period of significant inventory reduction.

“Although these results are disappointing,” he said, “we remain confident that fiscal 2023 will be a year of stabilization for our organization. We are also pleased with the consistent positive performance for our furniture category, which has continued to grow into a larger percentage of our sales.”

Among the focuses for its stabilization strategy this year, said Woodward, are “maintaining a leaner inventory position, further optimizing our product mix, capitalizing on margin improvements from a normalized supply chain environment and curating price points that appeal to a broader customer base.”

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