Zacks Investment Research Lowers Kirkland’s, Inc. (KIRK) to Hold

Zacks Investment Research downgraded shares of Kirkland’s, Inc. (NASDAQ:KIRK) from a strong-buy rating to a hold rating in a report published on Tuesday.

According to Zacks, “Kirkland's shares are improving significantly in the last three months in comparison to the industry. This is the result of narrower-than-expected loss and better-than-expected revenues in second-quarter fiscal 2017. In addition, Kirkland's recorded net sales growth of 7.0% due to increase in store count as well as comps growth. Sales were also driven by improved trends in existing stores, new store productivity and continued momentum in online activities. The growth in e-Commerce revenues were backed by a strong increase in website traffic, conversion and average order value. Despite overall strong sales growth, the company continues to face sluggish sales in Texas and has also been witnessing decline in traffic. Further, lower merchandise margins and higher supply chains costs are denting margins.”

KIRK has been the subject of several other reports. Sidoti upgraded Kirkland’s from a neutral rating to a buy rating and upped their target price for the company from $10.00 to $12.00 in a report on Tuesday, August 22nd. B. Riley restated a buy rating and issued a $14.50 target price on shares of Kirkland’s in a report on Monday, August 28th.

Shares of Kirkland’s (NASDAQ:KIRK) traded down 1.52% during mid-day trading on Tuesday, reaching $12.30. The company had a trading volume of 128,371 shares. The stock’s 50-day moving average price is $11.57 and its 200 day moving average price is $10.60. Kirkland’s has a 1-year low of $8.17 and a 1-year high of $17.41. The company has a market capitalization of $196.94 million, a PE ratio of 23.70 and a beta of 1.23.

Kirkland’s (NASDAQ:KIRK) last issued its earnings results on Tuesday, August 22nd. The specialty retailer reported ($0.24) earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of ($0.28) by $0.04. The company had revenue of $131.68 million during the quarter, compared to analysts’ expectations of $125.44 million. Kirkland’s had a return on equity of 6.59% and a net margin of 1.40%. The firm’s quarterly revenue was up 7.0% on a year-over-year basis. During the same period in the prior year, the business earned ($0.22) EPS. Equities analysts expect that Kirkland’s will post $0.57 EPS for the current year.

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Kirkland’s announced that its Board of Directors has initiated a stock buyback plan on Tuesday, August 22nd that authorizes the company to repurchase $10.00 million in shares. This repurchase authorization authorizes the specialty retailer to repurchase shares of its stock through open market purchases. Stock repurchase plans are often an indication that the company’s leadership believes its shares are undervalued.

A number of large investors have recently modified their holdings of the business. Victory Capital Management Inc. grew its holdings in Kirkland’s by 75.9% in the 3rd quarter. Victory Capital Management Inc. now owns 87,941 shares of the specialty retailer’s stock valued at $1,005,000 after buying an additional 37,941 shares in the last quarter. Crossmark Global Holdings Inc. acquired a new position in shares of Kirkland’s in the 3rd quarter valued at $169,000. Shell Asset Management Co. acquired a new position in shares of Kirkland’s in the 3rd quarter valued at $930,000. Arrowstreet Capital Limited Partnership lifted its stake in shares of Kirkland’s by 6.0% in the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 198,425 shares of the specialty retailer’s stock valued at $2,040,000 after purchasing an additional 11,294 shares during the last quarter. Finally, Cornerstone Capital Management Holdings LLC. lifted its stake in shares of Kirkland’s by 93.5% in the 2nd quarter. Cornerstone Capital Management Holdings LLC. now owns 111,312 shares of the specialty retailer’s stock valued at $1,143,000 after purchasing an additional 53,800 shares during the last quarter. Institutional investors own 88.07% of the company’s stock.

Kirkland’s Company Profile

Kirkland’s, Inc is a specialty retailer of home decor and gifts in the United States. The Company’s merchandise categories include wall decor, art, mirrors, lamps, decorative accessories, accent furniture, textiles, fragrance and accessories, frames, housewares, impulse and personal accessories, outdoor living and artificial floral products.

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