Kirkland's Reports First Quarter 2016 Results

NASHVILLE, Tenn., May 24, 2016

Net sales for the 13 weeks ended April 30, 2016 increased 9.8% to $129.9 million compared with $118.3 million for the 13 weeks ended May 2, 2015. Comparable store sales for the first quarter of fiscal 2016, including e-commerce sales, increased 0.5% compared with an increase of 3.0% in the prior-year quarter. Kirkland's opened 14 stores and closed 8 during the first quarter of fiscal 2016, bringing the total number of stores to 382 at quarter end.

Net income for the 13 weeks ended April 30, 2016 was $0.9 million, or $0.06 per diluted share, compared with net income of $2.5 million, or $0.14 per diluted share, for the 13 weeks ended May 2, 2015.

"The first quarter was in line with our expectations as we executed on our strategic priorities in a challenging traffic environment," said Mike Madden, President and Chief Executive Officer. "E-commerce revenues increased 28%, store conversion was positive, and our seasonal categories performed well. As expected, gross margin was impacted by a planned increase in promotional activity and startup costs for our new e-commerce fulfillment center. Operating expenses were tightly managed during the quarter and will remain a focus throughout the year."

"Importantly, we believe we're well-positioned to execute on our plans for 2016," continued Mr. Madden. "Inventory levels are moderating, and our new e-commerce fulfillment center is now fully operational. The fourteen stores we opened in the first quarter are performing above plan, and we expect to have the entire 2016 class open by the end of the third quarter. These developments are alleviating recent pressure on our supply chain and driving better efficiency across the organization as we prepare for the crucial fall and holiday selling periods."

Fiscal 2016 Outlook 
Kirkland's maintained its fiscal 2016 outlook given on March 11, 2016, which provides for diluted earnings per share in the range of $0.98 to $1.11.

Investor Conference Call and Web Simulcast 
Kirkland's will host a conference call today, May 24, 2016, at 11:00 a.m. ET. The number to call for the interactive teleconference is (412) 542-4163. A replay of the conference call will be available through Tuesday, May 31, 2016, by dialing (412) 317-0088 and entering the confirmation number, 10085801.