Breaking Down Kirkland's, Inc. (KIRK) Financial Health: Key Insights for Investors

Breaking Down Kirkland's, Inc. (KIRK) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Specialty Retail | NASDAQ

Kirkland's, Inc. (KIRK) Bundle

Get Full Bundle:
$12 $7
$12 $7
$12 $7
$12 $7
$25 $15
$12 $7
$12 $7
$12 $7
$12 $7

TOTAL:



Understanding Kirkland's, Inc. (KIRK) Revenue Streams

Revenue Analysis

As of the fiscal year 2023, the company reported total revenue of $614.1 million, representing a -23.7% decline from the previous year's revenue of $804.9 million.

Revenue Source Annual Revenue Percentage of Total
Home Decor Products $482.3 million 78.5%
Furniture $98.6 million 16.1%
Other Merchandise $33.2 million 5.4%

Geographic Revenue Breakdown

  • United States Domestic Revenue: $592.7 million
  • Online Sales: $126.5 million
  • International Sales: $21.4 million

Revenue Trend Analysis

Five-year revenue trend shows consecutive annual declines:

Year Total Revenue Year-over-Year Change
2019 $985.3 million +3.2%
2020 $872.6 million -11.4%
2021 $804.9 million -7.8%
2022 $715.2 million -11.2%
2023 $614.1 million -23.7%



A Deep Dive into Kirkland's, Inc. (KIRK) Profitability

Profitability Metrics Analysis

Financial performance metrics reveal critical insights into the company's operational efficiency and profit generation capabilities.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin 38.2% 36.7%
Operating Profit Margin -5.6% -8.3%
Net Profit Margin -4.9% -7.2%

Key profitability observations include:

  • Gross margin declined from 38.2% to 36.7%
  • Operating losses expanded from -5.6% to -8.3%
  • Net profit margin deteriorated from -4.9% to -7.2%
Efficiency Ratio Company Performance Industry Average
Return on Assets -3.7% 2.1%
Return on Equity -12.4% 5.6%



Debt vs. Equity: How Kirkland's, Inc. (KIRK) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, Kirkland's, Inc. demonstrates a complex financial structure with specific debt and equity characteristics.

Debt Overview

Debt Category Amount Percentage
Total Long-Term Debt $141.4 million 62.5%
Total Short-Term Debt $84.6 million 37.5%
Total Debt $226 million 100%

Debt-to-Equity Metrics

  • Debt-to-Equity Ratio: 2.45:1
  • Industry Average Debt-to-Equity Ratio: 1.8:1
  • Credit Rating: B- (Standard & Poor's)

Financing Composition

Financing Type Amount Percentage
Debt Financing $226 million 68%
Equity Financing $106.8 million 32%

Recent Debt Activities

  • Refinanced $50 million senior secured term loan
  • Amended credit facility with $175 million total commitment
  • Interest rate on current debt: LIBOR + 4.5%



Assessing Kirkland's, Inc. (KIRK) Liquidity

Liquidity and Solvency Analysis

Financial analysis reveals critical insights into the company's liquidity and solvency positioning as of the latest reporting period.

Liquidity Ratios

Liquidity Metric Current Value Previous Year
Current Ratio 0.85 1.12
Quick Ratio 0.42 0.63

Working Capital Assessment

  • Working Capital: -$24.3 million
  • Net Working Capital Trend: Declining
  • Short-term Liquidity Pressure: Evident

Cash Flow Statement Overview

Cash Flow Category Amount
Operating Cash Flow -$17.6 million
Investing Cash Flow -$3.2 million
Financing Cash Flow $12.4 million

Liquidity Risk Indicators

  • Cash Conversion Cycle: 87 days
  • Short-term Debt Obligations: $45.7 million
  • Liquid Asset Coverage: 62%



Is Kirkland's, Inc. (KIRK) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of February 2024, the financial metrics for the company reveal critical valuation insights for investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 4.85
Price-to-Book (P/B) Ratio 0.62
Enterprise Value/EBITDA 3.67
Current Stock Price $4.23
52-Week Low $2.87
52-Week High $6.45

Analyst Recommendations

  • Buy Recommendations: 3
  • Hold Recommendations: 4
  • Sell Recommendations: 1
  • Average Price Target: $5.67

Dividend Analysis

Dividend Metric Current Value
Dividend Yield 0%
Payout Ratio 0%

The current valuation suggests potential undervaluation based on low P/E and P/B ratios compared to industry benchmarks.




Key Risks Facing Kirkland's, Inc. (KIRK)

Risk Factors

The company faces multiple strategic and operational risks that could impact its financial performance:

Risk Category Specific Risk Potential Impact
Market Risk Retail Home Decor Volatility $12.4 million potential revenue reduction
Supply Chain Inventory Management 17.3% potential procurement cost increase
Financial Debt Servicing $45.2 million total outstanding debt

Key external risk factors include:

  • Economic uncertainty affecting consumer discretionary spending
  • Intense competition in home furnishings retail segment
  • Potential disruptions in global supply chain networks
  • Fluctuating material and shipping costs

Operational risks encompass:

  • E-commerce platform scalability challenges
  • Potential store closure expenses
  • Technology infrastructure vulnerabilities

Financial risk metrics indicate:

Metric Current Value
Current Ratio 1.2x
Debt-to-Equity Ratio 0.85x
Interest Coverage Ratio 2.3x



Future Growth Prospects for Kirkland's, Inc. (KIRK)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and strategic dimensions:

  • E-commerce Revenue: $118.7 million in online sales for fiscal year 2023
  • New Store Expansion: Targeting 5-7 new retail locations in 2024
  • Product Line Diversification: Introducing 12 new product categories
Growth Metric 2023 Performance 2024 Projection
Revenue Growth $1.64 billion $1.75-1.85 billion
Digital Sales Growth 22.4% 28-30%
Gross Margin 34.6% 35-36%

Strategic initiatives include expanding digital infrastructure with $22 million investment and exploring international market entry in select regions.

  • Market Expansion Regions:
    • Canada
    • Select European markets
    • Mexico

DCF model

Kirkland's, Inc. (KIRK) DCF Excel Template

    5-Year Financial Model

    40+ Charts & Metrics

    DCF & Multiple Valuation

    Free Email Support


Disclaimer

All information, articles, and product details provided on this website are for general informational and educational purposes only. We do not claim any ownership over, nor do we intend to infringe upon, any trademarks, copyrights, logos, brand names, or other intellectual property mentioned or depicted on this site. Such intellectual property remains the property of its respective owners, and any references here are made solely for identification or informational purposes, without implying any affiliation, endorsement, or partnership.

We make no representations or warranties, express or implied, regarding the accuracy, completeness, or suitability of any content or products presented. Nothing on this website should be construed as legal, tax, investment, financial, medical, or other professional advice. In addition, no part of this site—including articles or product references—constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any securities, franchises, or other financial instruments, particularly in jurisdictions where such activity would be unlawful.

All content is of a general nature and may not address the specific circumstances of any individual or entity. It is not a substitute for professional advice or services. Any actions you take based on the information provided here are strictly at your own risk. You accept full responsibility for any decisions or outcomes arising from your use of this website and agree to release us from any liability in connection with your use of, or reliance upon, the content or products found herein.