Kirkland's, Inc. (KIRK) | Investment Case

1. Company Snapshot

1.a. Company Description

Kirkland's, Inc.operates as a specialty retailer of home furnishings décor in the United States.The company's stores provide various merchandise, including holiday décor, furniture, textiles, ornamental wall décor, decorative accessories, art, mirrors, home fragrance, lighting, floral, housewares, and gifts.

The company operates its stores under the Kirkland's, Kirkland's Home, Kirkland's Home Outlet, Kirkland's Outlet, and The Kirkland Collection names.As of January 29, 2022, the company operated 361 stores in 35 states, as well as an e-commerce website, www.kirklands.com.Kirkland's, Inc.

was founded in 1966 and is headquartered in Brentwood, Tennessee.

Show Full description

1.b. Last Insights on KIRK

Negative drivers behind Kirkland's recent performance include the company's ongoing transformation efforts, which have led to a decline in profitability. The acceleration of this transformation, announced in February 2025, has likely resulted in short-term costs and disruptions. Additionally, the company's reliance on a $25 million investment from Beyond, Inc. in February 2025 has raised concerns about its financial stability. Furthermore, the recent announcement of financial results for the fourth quarter and fiscal year 2024 on May 1, 2025, may indicate a delay in the company's ability to report its financial performance, potentially leading to market uncertainty.

1.c. Company Highlights

Last Price	1.66
Change Percentage	11.41%
Open	1.61
Previous Close	1.49
Market Cap ( Millions)	37
Volume	1102439
Year High	2.5
Year Low	1.05
M A 50	1.22
M A 200	1.46

FCF Yield	-39.00%
Dividend Yield	0.00%
ROE	130.43%
Debt / Equity	-342.63%
Net Debt / EBIDTA	-623.07%
Price To Book	-0.79
Price Earnings Ratio	-0.88
Price To FCF	-2.56
Price To sales	0.07
EV / EBITDA	-7.72

2. Kirkland's Q2 Earnings: A Challenging Quarter Amidst Transformation

The company's Q2 financial performance was marked by a decline in net sales to $75.8M, a 9.7% comp sales decrease, and a net loss of $19.4M, wider than the prior year's loss of $14.5M. Adjusted loss per share was $1.11, compared to analyst estimates of -$0.7. Gross margin declined 410 bps to 16.3% due to inventory liquidation, tornado-related write-offs, and tariffs. As CEO Amy Sullivan noted, "the transformation is an omni-channel strategy, not just branding."

Publication Date: Sep -21

                                    📋 Highlights
                                    E-commerce Stabilization:
                                                Shift to brick-and-mortar aims to stabilize profitability after tornado disrupted operations; e-commerce expected to normalize to pre-tornado decline rates (30% total sales contribution).
Financial Position:
                                                Debt near $68 million with $30 million liquidity; tariffs to pressure Q3 gross margins by ~100 bps (vs. 30 bps in Q2), easing in Q4 as impacted inventory sells through.
Tariff Mitigation:
                                                Vendor negotiations and strategic pricing reduce China tariff risks; 85–90% domestic sourcing for Bed Bath & Beyond conversions limits exposure.
Store Conversions:
                                                30 conversions planned for Q1 2026, expanding to back-to-campus season momentum; domestic sourcing reduces reliance on India/China (vs. 30 bps Q2 China impact).
Future Timelines:
                                                Inventory buys finalized by October 2024 to support Q1 2026 conversions; goal: broaden momentum to drive first-half 2026 profitability.

                                

Financial Performance and Valuation

The current valuation metrics indicate a challenging outlook, with a P/S Ratio of 0.1, EV/EBITDA of -8.43, and a Free Cash Flow Yield of -26.28%. The ROE stands at 130.43%, while the ROIC is -15.86%. These metrics suggest that the market is pricing in significant challenges ahead.

Operational Challenges and Transformation Strategy

The company faced operational challenges, including a tornado that disrupted the Jackson distribution center and inventory liquidation for Bed Bath & Beyond conversions. Despite these challenges, the first store opened in Brentwood, TN, with sales exceeding expectations. The company plans to convert all 300+ stores to Bed Bath & Beyond over 24 months at a CapEx of under $100k per store.

Future Outlook and Store Conversions

The company is leveraging the Bed Bath & Beyond brand, expanding into wholesale, and developing buybuy BABY omni-channel plans. With 25 store closures expected by 2026, the company aims to retain 250-275 Kirkland stores, focusing on growth in Bed Bath-dominated markets. The store conversion strategy is expected to drive future growth, with the company having secured buys for 30 conversions in Q1 2026.

3. NewsRoom

THE BRAND HOUSE COLLECTIVE PROVIDES BUSINESS UPDATE

Sep -16

Source: prnewswire.com

The Brand House Collective to Report Second Quarter Fiscal 2025 Financial Results on September 16, 2025

Sep -10

Source: prnewswire.com

Iconic Bed Bath & Beyond Brand Returns to Stores with First Bed Bath & Beyond Home in Nashville

Jul -28

Source: prnewswire.com

Kirkland's Inc. Accelerates New Era with Strategic Leadership Appointments to Advance Transformation as The Brand House Collective

Jul -01

Source: prnewswire.com

Kirkland's Home is closing dozens of stores in new rebrand, adding to list of retailers shutting locations in 2025

Jun -20

Source: fastcompany.com

Kirkland's, Inc. to Rebrand as The Brand House Collective, Inc. Accelerating Brand Conversions Utilizing Bed Bath & Beyond, Overstock, buybuy Baby

Jun -17

Source: prnewswire.com

KIRKLAND'S REPORTS FIRST QUARTER FISCAL 2025 RESULTS

Jun -17

Source: prnewswire.com

Kirkland's Gears Up For Q1 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts

Jun -16

Source: benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.81%)

6. Segments

Holiday Decor

Expected Growth: 4.83%

Kirkland's Inc.'s 4.83% growth in Holiday Decor is driven by increasing consumer spending on home decor, rising demand for seasonal decorations, and the company's strategic expansion into e-commerce and omnichannel retailing, allowing for broader market reach and convenience.

Furniture

Expected Growth: 4.83%

Kirkland's, Inc. furniture segment growth of 4.83% is driven by increasing demand for home decor and furniture, particularly among millennials and Gen Z consumers. The company's focus on e-commerce expansion, strategic pricing, and new product introductions also contribute to growth. Additionally, the rise of the 'homebody economy' and consumers' willingness to invest in home furnishings support the segment's upward trend.

Textiles

Expected Growth: 4.83%

Kirkland's, Inc.'s textiles segment growth of 4.83% is driven by increasing demand for home decor and furniture, expansion of e-commerce channels, and strategic pricing strategies. Additionally, the company's focus on private label products and partnerships with suppliers have contributed to the growth.

Decorative Accessories

Expected Growth: 4.83%

Kirkland's Inc.'s decorative accessories segment growth of 4.83% is driven by increasing demand for home decor, expansion of e-commerce platform, and strategic pricing strategies. Additionally, the company's focus on private label products, effective inventory management, and cost savings initiatives have contributed to the growth.

Art

Expected Growth: 4.83%

Kirkland's, Inc. art segment growth of 4.83% is driven by increasing demand for home decor, expansion into e-commerce, and strategic partnerships with artists and designers. Additionally, the company's focus on affordable luxury and trendy pieces resonates with millennials, contributing to the segment's growth.

Home Fragrance

Expected Growth: 4.65%

Kirkland's Home Fragrance segment growth of 4.65% is driven by increasing consumer preference for home decor and ambiance, rising demand for premium and unique fragrances, and strategic expansion into e-commerce channels. Additionally, the company's focus on product innovation, quality, and affordability contributes to its market share gain.

Mirrors

Expected Growth: 4.83%

Kirkland's, Inc. mirrors segment growth of 4.83% driven by increasing demand for home decor and furniture, particularly among millennials and Gen Z. Strong e-commerce presence, competitive pricing, and strategic partnerships with suppliers also contribute to growth. Additionally, the company's focus on omnichannel retailing and in-store experience enhancements attract customers, further boosting sales.

Ornamental Wall Decor

Expected Growth: 4.83%

Kirkland's Ornamental Wall Decor growth driven by increasing demand for home decor, rising disposable income, and expanding online presence. Additionally, the company's focus on affordable luxury and trendy designs resonates with millennials, contributing to the 4.83% growth.

Lighting

Expected Growth: 4.83%

Kirkland's Inc.'s lighting segment growth of 4.83% is driven by increasing demand for home decor, rising consumer spending on home furnishings, and the company's strategic expansion into e-commerce and omnichannel retailing, allowing it to reach a broader customer base.

Housewares

Expected Growth: 4.83%

Kirkland's, Inc. Housewares segment growth of 4.83% is driven by increasing demand for home decor and furniture, particularly among millennials and Gen Z consumers. Additionally, the company's focus on e-commerce expansion, strategic pricing, and effective inventory management have contributed to the segment's growth.

Floral

Expected Growth: 4.77%

Kirkland's, Inc.'s Floral segment growth of 4.77% is driven by increasing demand for home decor and gifting, expansion of e-commerce channels, and strategic pricing strategies. Additionally, the company's focus on product innovation, quality, and customer experience has contributed to the growth.

Outdoor

Expected Growth: 4.83%

Kirkland's Outdoor segment growth of 4.83% is driven by increasing consumer spending on outdoor furniture and decor, fueled by rising home ownership and renovation activities. Additionally, the company's focus on e-commerce expansion, product innovation, and strategic pricing strategies have contributed to the segment's growth.

Gift

Expected Growth: 4.83%

Kirkland's, Inc. growth driven by strategic store openings, e-commerce expansion, and effective inventory management. Strong brand recognition, competitive pricing, and appealing product offerings also contribute to the 4.83% growth. Additionally, the company's focus on home decor and furniture, which are less discretionary, helps maintain sales momentum.

7. Detailed Products

Home Decor

Kirkland's offers a wide range of home decor items, including wall decor, decorative accents, and seasonal decorations.

Furniture

Kirkland's provides a variety of stylish and functional furniture pieces, such as tables, chairs, and shelves.

Textiles

Kirkland's offers a wide selection of textiles, including throw pillows, blankets, and rugs.

Art and Wall Decor

Kirkland's features a diverse collection of art and wall decor, including paintings, prints, and sculptures.

Lighting

Kirkland's offers a variety of lighting options, including table lamps, floor lamps, and string lights.

Gifts and Accessories

Kirkland's provides a range of gifts and accessories, including candles, vases, and decorative boxes.

8. Kirkland's, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Kirkland's, Inc. faces moderate threat from substitutes due to the presence of alternative home decor and furniture retailers. However, the company's focus on providing high-quality products at affordable prices helps to mitigate this threat.

Bargaining Power Of Customers

Kirkland's, Inc. has a large customer base, but individual customers do not have significant bargaining power due to the company's diversified customer base and lack of dependence on a single customer.

Bargaining Power Of Suppliers

Kirkland's, Inc. has a moderate level of dependence on its suppliers, particularly for raw materials and components. However, the company's diversified supplier base and long-term relationships help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low for Kirkland's, Inc. due to the high barriers to entry in the home decor and furniture retail industry, including significant capital requirements and established brand recognition.

Intensity Of Rivalry

The home decor and furniture retail industry is highly competitive, with many established players competing for market share. Kirkland's, Inc. faces intense rivalry from companies such as Bed Bath & Beyond, At Home, and TJX Companies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	95.95%
Debt Cost	3.95%
Equity Weight	4.05%
Equity Cost	15.33%
WACC	4.41%
Leverage	2369.33%

11. Quality Control: Kirkland's, Inc. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Kirkland's

A-Score: 3.9/10

Value: 10.0

Growth: 2.1

Quality: 5.9

Yield: 0.0

Momentum: 3.0

Volatility: 2.3

1-Year Total Return ->

CarParts

A-Score: 3.7/10

Value: 9.8

Growth: 4.0

Quality: 4.0

Yield: 0.0

Momentum: 3.0

Volatility: 1.7

1-Year Total Return ->

Olaplex

A-Score: 3.6/10

Value: 8.0

Growth: 4.6

Quality: 5.8

Yield: 0.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

GrowGen

A-Score: 3.4/10

Value: 9.4

Growth: 2.1

Quality: 4.2

Yield: 0.0

Momentum: 3.5

Volatility: 1.3

1-Year Total Return ->

Solo Brands

A-Score: 3.4/10

Value: 10.0

Growth: 5.7

Quality: 3.7

Yield: 0.0

Momentum: 1.0

Volatility: 0.0

1-Year Total Return ->

Beyond

A-Score: 3.2/10

Value: 8.4

Growth: 0.7

Quality: 3.4

Yield: 0.0

Momentum: 5.5

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

13.42%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

4.41%

Kirkland's, Inc. - US4974981056

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KIRK

1.c. Company Highlights

Lower Growth

More Volatile

Stable Momentum

Earnings Beats

Cheaper

Revenues Miss

Revenues Beats

Medium Volatility

Weak Momentum

Average Yield

Earnings Miss

2. Kirkland's Q2 Earnings: A Challenging Quarter Amidst Transformation

Financial Performance and Valuation

Operational Challenges and Transformation Strategy

Future Outlook and Store Conversions

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.81%)

6. Segments

Holiday Decor

Expected Growth: 4.83%

Furniture

Expected Growth: 4.83%

Textiles

Expected Growth: 4.83%

Decorative Accessories

Expected Growth: 4.83%

Art

Expected Growth: 4.83%

Home Fragrance

Expected Growth: 4.65%

Mirrors

Expected Growth: 4.83%

Ornamental Wall Decor

Expected Growth: 4.83%

Lighting

Expected Growth: 4.83%

Housewares

Expected Growth: 4.83%

Floral

Expected Growth: 4.77%

Outdoor

Expected Growth: 4.83%

Gift

Expected Growth: 4.83%

7. Detailed Products

Home Decor

Furniture

Textiles

Art and Wall Decor

Lighting

Gifts and Accessories

8. Kirkland's, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Kirkland's, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

12.e Scoring ^Insights

12.f DCF ^BETA