Kirkland's (Nasdaq: KIRK) posts 38 pct drop in 1Q profit

Northern, WI 5/18/12 (StreetBeat) -- Kirkland's (Nasdaq: KIRK) first-quarter profit tumbled 38 percent, as sales dropped off in the latter half of the quarter and the home decor store responded with promotions and price cuts.

The company also issued disappointing predictions for the current quarter and full year.

For the quarter ended April 28, the Nashville, Tenn., company earned $2 million, or 10 cents per share, down from $3.2 million, or 15 cents per share, in the same quarter last year.

Sales rose 3.6 percent to $97.8 million from $94.4 million.

The profit beat Wall Street predictions by a penny, according to a FactSet poll.

Kirkland's said its revenue at stores open at least a year fell 1.2 percent.

As it stepped up marketing to counter a drop off in sales, margins and same-store sales both fell, the company said.

For the current quarter, Kirkland's projected a loss of between 7 cents and 11 cents per share on $94 million to $96 million in sales. Analysts polled by FactSet had expected a loss of 1 cent per share on $95.1 million in revenue.

For the full year 2012, the company projected a profit of 87 to 97 cents per share on sales growth of between 7 percent and 9 percent. Based on Kirkland's 2011 sales of $430.3 million, the guidance implies fiscal 2012 sales of between $460.4 million and $469 million.

Analysts polled by FactSet expect a 2012 profit of $1.06 per share on $469 million in revenue.

Kirkland's Inc. opened 5 stores and closed 17 during the quarter, bring its store base to 297 as of April 28. The company said it still expects to open 40 to 45 new stores and close about 30 stores this year.

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