Kirkland’s Inc. (NASDAQ:KIRK) reported a third-quarter 2024 sales decline of 1.7% year over year to $114.42 million, beating the consensus of $110.23 million.

Comparable sales decreased 3.0% despite a 1.6% increase in comparable store sales compared to Q3 2023, with roughly 1.0% of the decline attributed to hurricane-related disruptions.

The decrease was mainly due to lower average ticket and e-commerce conversion, partly offset by higher traffic and store conversion.

Gross profit margin expanded 174 basis points YoY to 28.1%. The operating loss for the quarter was $2.39 million versus a loss of $6.65 million last year.

Adjusted EBITDA for Q3 was $0.5 million, compared to a loss of $3.2 million in the same quarter last year. Adj. EPS loss of 29 cents missed the consensus of 27 cents loss.

As of November 2, 2024, inventory was $111.2 million, up 5.7% from the prior year, primarily due to later inventory receipts this year. The company had $6.8 million in cash, $65.0 million in debt under its $90.0 million credit facility, and $15.4 million in debt to Beyond, Inc.

Strategic Partnership with Beyond: On October 21, 2024, the company formed a strategic partnership with Beyond, Inc., with Beyond investing $25 million in a debt and equity transaction. $17 million from the Beyond Credit Agreement was used to repay the FILO Term Loan and reduce revolving credit facility borrowings.

Net cash used in operating activities for the nine months ended stood at $39.03 million, compared to $42.686 million a year ago. The company Ended the quarter with 325 stores, consistent with Q2 2024.

Price Action: KIRK shares are trading lower by 6.93% to $1.88 at the check on Friday.

Photo by JHVEPhoto via Shutterstock