NASHVILLE, Tenn. (AP) ¿ Kirkland's Inc. said Friday it returned to a profit in the third quarter, helped in part by fewer markdowns and increased traffic.

The home decor retailer also lifted its full-year earnings outlook on its strong year-to-date performance.

The news sent the company's stock up $1.85, or 14 percent, to $15.13 in morning trading.

Kirkland's earned $5.6 million, or 27 cents per share, compared with a loss of $1.5 million, or 7 cents per share, during the same period a year earlier.

Excluding some income tax credits and other items, profit was $4.6 million, or 23 cents per share, compared with a loss of $853,000, or 4 cents per share a year earlier.

Revenue for the three months ended Oct. 31 rose 8 percent to $92.4 million from $85.9 million.

Sales at stores open at least a year climbed 11.3 percent in the quarter. This figure is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Kirkland's expects fiscal 2009 profit to be "significantly above" the prior year's $10.1 million profit and foresees sales "slightly above" fiscal 2008.

The company said it plans to open 30 to 40 new stores in fiscal 2010 and close 15 to 20 locations. Kirkland's had 296 stores at quarter's end.
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