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Kirkland's 2nd-quarter Net Income Dips

NASHVILLE, Tenn. (AP) â¿¿ Home retailer Kirkland's Inc. said Friday its net income slipped in the fiscal second quarter as shoppers hunted for discounts, which hurt its sales.

The company said its profit fell 6 percent in the ended July 31, to $3.3 million, or 16 cents per share, from $3.4 million, or 17 cents per share. Revenue rose 2 percent, to $89.5 million from $87.7 million.

Kirkland's said customers are looking harder for bargains and they are more cautious because unemployment is high. Merchandise delivery delays and greater freight costs also hurt results. The company said more shoppers came to its stores than a year ago, however.

Kirkland's had 286 locations at the end of the quarter, down from 291 a year ago. The company opened seven stores during the quarter and closed two. At stores open at least one year, sales increased 1 percent. That's considered a key reading of retailer health because it leaves out results from stores that have opened or closed in the last year.

The company said it expects a "slight increase" in adjusted profit compared to the $1.42 per share it earned in fiscal 2009. Previously Kirkland's said its profit would decrease because it is paying a higher tax rate this year. It forecast weaker revenue growth, however, and said it expects sales to grow 4 percent to 6 percent rather than 5 percent to 8 percent.

That implies total revenue of $422.4 million to $430.6 million, down from a previous estimate of $426.5 million to $438.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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