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Kirkland's Reports Fourth Quarter And Fiscal 2011 Results

Robert Alderson, Kirkland's President and Chief Executive Officer, said, “Consistent with our pre-announcement in early February, we finished the fourth quarter on an encouraging note. We returned to positive comparable store sales and eclipsed our original earnings estimates, while making strong progress on our share repurchase plan. The positive sales trends experienced during the fourth quarter continued through February and, combined with our store growth plans and continued acceleration in e-commerce sales, suggest moderate but steady improvement in our business for fiscal 2012.”

Stock Repurchase Plan

During the fourth quarter of fiscal 2011, the Company repurchased 1,194,992 shares of common stock for a total of $15.4 million, or an average price of $12.90 per share. Since the inception of the repurchase plan, the Company has repurchased 2,117,066 shares of common stock for a total of $24.6 million, or an average price of $11.61 per share. The Company has $15.4 million remaining under its repurchase authorization. As of January 28, 2012, the Company had 18.4 million shares of common stock outstanding.

Fiscal 2012 Performance Goals

Store Growth:
    For the 53-week period ending February 2, 2013 (“fiscal 2012”), the Company expects to open 35 to 45 new stores and close approximately 25 stores. This expected unit growth of approximately 3% to 6% would represent an increase in square footage of approximately 9% to 13%. New store openings will be weighted more toward the second half of the year, while closings will be weighted more toward the first half.

The Company expects total sales for fiscal 2012 to increase in the range of 10% to 12% compared with fiscal 2011. This expectation for total sales growth reflects the additional week in the retail calendar for Fiscal 2012. This level of sales growth would imply comparable store sales of flat to slightly positive for the fiscal year, excluding the impact of the additional week of sales.


Based on the current outlook, the Company expects operating margin in fiscal 2012 to be approximately equal to that of fiscal 2011 with continued benefits from lower inbound freight costs – particularly in the first half of the year – and improved merchandise performance, offset slightly by an expected increase in fuel costs impacting outbound transportation, a planned increase in marketing expenses, as well as investments in additional personnel in key areas of the business to support the Company’s growth plans and technology investments.


Based on the above assumptions, the Company expects earnings per share for fiscal 2012 to be in the range of $1.10 to $1.15. The Company expects its effective tax rate for fiscal 2012 to range between 38% and 38.5%.

Cash Flow:
Excluding activity under the Company’s share repurchase program, the Company expects to again generate positive cash flow in fiscal 2012. Capital expenditures in fiscal 2012 are estimated to range between $29 million and $32 million.

First Quarter Fiscal 2012 Outlook

The Company issued guidance for the first quarter ending April 28, 2012, of net income of $0.11 to $0.14 per diluted share. Net sales are expected to be $98 million to $100 million, with comparable store sales flat to slightly positive. The Company expects to open approximately 5 stores and close approximately 15 stores during the quarter.

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