Kirkland's (KIRK) 10-Q 6 Sep 23 2024 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 29, 2023	Aug. 30, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jul. 29, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--02-03
Entity Registrant Name	Kirkland’s, Inc.
Entity Central Index Key	0001056285
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Current Reporting Status	Yes
Entity File Number	000-49885
Entity Tax Identification Number	62-1287151
Entity Address, Address Line One	5310 Maryland Way
Entity Address, City or Town	Brentwood
Entity Address, State or Province	TN
Entity Incorporation, State or Country Code	TN
Entity Address, Postal Zip Code	37027
City Area Code	615
Local Phone Number	872-4800
Title of 12(b) Security	Common Stock
Trading Symbol	KIRK
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		12,917,373

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jul. 29, 2023	Jan. 28, 2023	Jul. 30, 2022
Current assets:
Cash and cash equivalents	$ 4,890	$ 5,171	$ 10,330
Inventories, net	98,949	84,071	141,702
Prepaid expenses and other current assets	5,697	5,089	7,273
Total current assets	109,536	94,331	159,305
Property and equipment:
Equipment	19,593	19,614	19,953
Furniture and fixtures	65,632	66,906	68,653
Leasehold improvements	102,068	103,525	106,109
Computer software and hardware	82,517	81,685	78,886
Projects in progress	1,276	743	3,835
Property and equipment, gross	271,086	272,473	277,436
Accumulated depreciation	(237,208)	(233,797)	(231,502)
Property and equipment, net	33,878	38,676	45,934
Operating lease right-of-use assets	133,352	134,525	140,310
Other assets	6,818	6,714	7,891
Total assets	283,584	274,246	353,440
Current liabilities:
Accounts payable	56,483	43,739	61,569
Accrued expenses	26,432	26,069	27,636
Operating lease liabilities	40,249	41,499	40,801
Total current liabilities	123,164	111,307	130,006
Operating lease liabilities	111,746	114,613	123,426
Revolving line of credit	46,000	15,000	55,000
Other liabilities	3,834	3,553	4,897
Total liabilities	284,744	244,473	313,329
Shareholders’ equity:
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at July 29, 2023, January 28, 2023, and July 30, 2022, respectively	0	0	0
Common stock, no par value; 100,000,000 shares authorized; 12,917,373; 12,754,368; and 12,754,368 shares issued and outstanding at July 29, 2023, January 28, 2023, and July 30, 2022, respectively	175,988	175,450	174,654
Accumulated deficit	(177,148)	(145,677)	(134,543)
Total shareholders’ equity	(1,160)	29,773	40,111
Total liabilities and shareholders’ equity	$ 283,584	$ 274,246	$ 353,440

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jul. 29, 2023	Jan. 28, 2023	Jul. 30, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0	$ 0	$ 0
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0	0
Preferred stock, shares outstanding (in shares)	0	0	0
Common stock, par value	$ 0	$ 0	$ 0
Common stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Common stock, shares issued (in shares)	12,917,373	12,754,368	12,754,368
Common stock, shares outstanding (in shares)	12,917,373	12,754,368	12,754,368

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Income Statement [Abstract]
Net sales	$ 89,504,000	$ 102,101,000	$ 186,379,000	$ 205,386,000
Cost of sales	72,065,000	83,576,000	143,069,000	158,569,000
Gross profit	17,439,000	18,525,000	43,310,000	46,817,000
Operating expenses:
Compensation and benefits	19,217,000	21,507,000	39,256,000	42,399,000
Other operating expenses	14,090,000	16,994,000	28,828,000	33,792,000
Depreciation (exclusive of depreciation included in cost of sales)	1,222,000	1,596,000	2,428,000	3,293,000
Asset impairment	1,001,000	228,000	1,226,000	228,000
Total operating expenses	35,530,000	40,325,000	71,738,000	79,712,000
Operating loss	(18,091,000)	(21,800,000)	(28,428,000)	(32,895,000)
Interest expense	750,000	366,000	1,252,000	522,000
Other income	(127,000)	(83,000)	(219,000)	(155,000)
Loss before income taxes	(18,714,000)	(22,083,000)	(29,461,000)	(33,262,000)
Income tax expense (benefit)	650,000	3,622,000	2,010,000	298,000
Net loss	$ (19,364,000)	$ (25,705,000)	$ (31,471,000)	$ (33,560,000)
Loss per share:
Basic	$ (1.51)	$ (2.02)	$ (2.46)	$ (2.65)
Diluted	$ (1.51)	$ (2.02)	$ (2.46)	$ (2.65)
Weighted average shares outstanding:
Basic	12,857	12,740	12,817	12,653
Diluted	12,857	12,740	12,817	12,653

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Accumulated Deficit
Balance, beginning of period at Jan. 29, 2022	$ 81,126	$ 175,856	$ (94,730)
Balance, beginning of period (in shares) at Jan. 29, 2022		12,631,347
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	16	$ 16
Exercise of stock options (in shares)		2,705
Restricted stock issued		797,849
Net share settlement of stock options and restricted stock units	(2,375)	$ (2,375)
Net share settlement of stock options and restricted stock units (in shares)		(224,320)
Stock-based compensation expense	548	$ 548
Repurchase and retirement of common stock	(6,253)		(6,253)
Repurchase and retirement of common stock (in shares)		(479,966)
Net Income (Loss)	(7,855)		(7,855)
Balance, end of period at Apr. 30, 2022	65,207	$ 174,045	(108,838)
Balance, end of period (in shares) at Apr. 30, 2022		12,727,615
Balance, beginning of period at Jan. 29, 2022	81,126	$ 175,856	(94,730)
Balance, beginning of period (in shares) at Jan. 29, 2022		12,631,347
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	$ 16
Repurchase and retirement of common stock (in shares)	(479,966)
Net Income (Loss)	$ (33,560)
Balance, end of period at Jul. 30, 2022	$ 40,111	$ 174,654	(134,543)
Balance, end of period (in shares) at Jul. 30, 2022	12,754,368	12,754,368
Balance, beginning of period at Apr. 30, 2022	$ 65,207	$ 174,045	(108,838)
Balance, beginning of period (in shares) at Apr. 30, 2022		12,727,615
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued		28,574
Net share settlement of stock options and restricted stock units	(8)	$ (8)
Net share settlement of stock options and restricted stock units (in shares)		(1,821)
Stock-based compensation expense	$ 617	$ 617
Repurchase and retirement of common stock (in shares)	0
Net Income (Loss)	$ (25,705)		(25,705)
Balance, end of period at Jul. 30, 2022	$ 40,111	$ 174,654	(134,543)
Balance, end of period (in shares) at Jul. 30, 2022	12,754,368	12,754,368
Balance, beginning of period at Jan. 28, 2023	$ 29,773	$ 175,450	(145,677)
Balance, beginning of period (in shares) at Jan. 28, 2023	12,754,368	12,754,368
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued		86,824
Net share settlement of stock options and restricted stock units	$ (76)	$ (76)
Net share settlement of stock options and restricted stock units (in shares)		(28,294)
Stock-based compensation expense	490	$ 490
Net Income (Loss)	(12,107)		(12,107)
Balance, end of period at Apr. 29, 2023	18,080	$ 175,864	(157,784)
Balance, end of period (in shares) at Apr. 29, 2023		12,812,898
Balance, beginning of period at Jan. 28, 2023	$ 29,773	$ 175,450	(145,677)
Balance, beginning of period (in shares) at Jan. 28, 2023	12,754,368	12,754,368
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	$ 0
Repurchase and retirement of common stock (in shares)	0
Net Income (Loss)	$ (31,471)
Balance, end of period at Jul. 29, 2023	$ (1,160)	$ 175,988	(177,148)
Balance, end of period (in shares) at Jul. 29, 2023	12,917,373	12,917,373
Balance, beginning of period at Apr. 29, 2023	$ 18,080	$ 175,864	(157,784)
Balance, beginning of period (in shares) at Apr. 29, 2023		12,812,898
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued		104,475
Stock-based compensation expense	$ 124	$ 124
Repurchase and retirement of common stock (in shares)	0
Net Income (Loss)	$ (19,364)		(19,364)
Balance, end of period at Jul. 29, 2023	$ (1,160)	$ 175,988	$ (177,148)
Balance, end of period (in shares) at Jul. 29, 2023	12,917,373	12,917,373

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022
Cash flows from operating activities:
Net loss	$ (31,471,000)	$ (33,560,000)
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation of property and equipment	6,349,000	8,837,000
Amortization of debt issue costs	50,000	46,000
Asset impairment	1,226,000	228,000
(Gain) loss on disposal of property and equipment	(18,000)	183,000
Stock-based compensation expense	614,000	1,165,000
Changes in assets and liabilities:
Inventories, net	(14,878,000)	(27,673,000)
Prepaid expenses and other current assets	(713,000)	3,489,000
Accounts payable	12,529,000	(1,165,000)
Accrued expenses	(1,174,000)	(1,264,000)
Income taxes payable (refundable)	1,642,000	(2,136,000)
Operating lease assets and liabilities	(2,976,000)	(3,840,000)
Other assets and liabilities	291,000	(377,000)
Net cash used in operating activities	(28,529,000)	(56,067,000)
Cash flows from investing activities:
Proceeds from sale of property and equipment	74,000	33,000
Capital expenditures	(2,294,000)	(5,019,000)
Net cash used in investing activities	(2,220,000)	(4,986,000)
Cash flows from financing activities:
Borrowings on revolving line of credit	36,000,000	55,000,000
Repayments on revolving line of credit	(5,000,000)	0
Debt issuance costs	(456,000)	0
Cash used in net share settlement of stock options and restricted stock units	(76,000)	(2,383,000)
Proceeds received from employee stock option exercises	0	16,000
Repurchase and retirement of common stock	0	(6,253,000)
Net cash provided by (used in) financing activities	30,468,000	46,380,000
Cash and cash equivalents:
Net decrease	(281,000)	(14,673,000)
Beginning of the period	5,171,000	25,003,000
End of the period	4,890,000	10,330,000
Supplemental schedule of non-cash activities:
Non-cash accruals for purchases of property and equipment	$ 914,000	$ 1,502,000

Description of Business and Bas

Description of Business and Basis of Presentation	6 Months Ended
	Jul. 29, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business and Basis of Presentation	Note 1 – Description of Business and Basis of Presentation Nature of Business — Kirkland’s, Inc. (the “Company”, “we”, “our” or “us”) is a specialty retailer of home décor and furnishings in the United States operating 340 stores in 35 states as of July 29, 2023 , as well as an e-commerce website, www.kirklands.com, under the Kirkland’s Home brand. Principles of consolidation — The condensed consolidated financial statements of the Company include the accounts of Kirkland’s, Inc. and its wholly-owned subsidiaries, Kirkland’s Stores, Inc., Kirkland’s DC, Inc., and Kirkland’s Texas, LLC. Significant intercompany accounts and transactions have been eliminated. Basis of presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and pursuant to the reporting and disclosure rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2023. Seasonality — The results of the Company’s operations for the 13-week and 26-week periods ended July 29, 2023 are not indicative of the results to be expected for any other interim period or for the entire fiscal year due to seasonality factors. Fiscal year — The Company’s fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. Accordingly, fiscal 2023 represents the 53 weeks ending on February 3, 2024 and fiscal 2022 represents the 52 weeks ended on January 28, 2023 . Use of estimates — The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than those at fiscal year-end. Changes in estimates are recognized in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include, but are not limited to, impairment assessments on long-lived assets, inventory reserves, self-insurance reserves and deferred tax asset valuation allowances.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jul. 29, 2023
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Note 2 –Revenue Recognition Net sales — Net sales includes the sale of merchandise, net of returns, shipping revenue, gift card breakage revenue and revenue earned from our private label credit card program and excludes sales taxes. Sales returns reserve — The Company reduces net sales and estimates a liability for sales returns based on historical return trends, and the Company believes that its estimate for sales returns is a reasonably accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. The Company had a liability of approximately $ 1.3 million, $ 1.5 million and $ 1.4 million reserved for sales returns at July 29, 2023, January 28, 2023 and July 30, 2022 , respectively, included in accrued expenses on the condensed consolidated balance sheets. The related sales return reserve products recovery asset included in prepaid expenses and other current assets on the condensed consolidated balance sheets was approximately $ 636,000 , $ 705,000 and $ 742,000 at July 29, 2023, January 28, 2023, and July 30, 2022, respectively. Deferred e-commerce revenue —The Company recognizes revenue at the time of sale of merchandise to customers in its stores. E-commerce revenue is recorded at the estimated time of delivery to the customer. If the Company receives payment before completion of its customer obligations, the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. Deferred revenue related to e-commerce orders that have been shipped but not estimated to be received by customers included in accrued expenses on the condensed consolidated balance sheets was approximately $ 1.5 million, $ 0.7 million and $ 1.2 million at July 29, 2023, January 28, 2023 and July 30, 2022 , respectively. The related contract assets, reflected in inventories, net on the condensed consolidated balance sheets, totaled approximately $ 757,000 , $ 359,000 and $ 656,000 at July 29, 2023, January 28, 2023 and July 30, 2022, respectively. Gift cards — Gift card sales are recognized as revenue when tendered for payment. While the Company honors all gift cards presented for payment, the Company determines the likelihood of redemption to be remote for certain gift card balances due to long periods of inactivity. The Company uses the redemption recognition method to account for breakage for unused gift card amounts where breakage is recognized as gift cards are redeemed for the purchase of goods based upon a historical breakage rate. In these circumstances, to the extent the Company determines there is no requirement for remitting unredeemed card balances to government agencies under unclaimed property laws, such amounts are recognized in the condensed consolidated statements of operations as a component of net sales. The table below sets forth selected gift card liability information (in thousands) for the periods indicated: July 29, 2023 January 28, 2023 July 30, 2022 Gift card liability, net of estimated breakage (included in accrued expenses) $ 12,027 $ 14,077 $ 13,981 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Gift card breakage revenue (included in net sales) $ 304 $ 191 $ 1,335 $ 393 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 1,348 1,572 2,785 3,157 Customer loyalty program — The Company has a loyalty program called the K-club that allows members to receive points based on qualifying purchases that are converted into certificates that may be redeemed on future purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The related loyalty program deferred revenue included in accrued expenses on the condensed consolidated balance sheets was approximately $ 1.0 million, $ 1.2 million and $ 1.0 million at July 29, 2023, January 28, 2023 and July 30, 2022, respectively.

Income Taxes

Income Taxes	6 Months Ended
	Jul. 29, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Note 3 – Income Taxes For the 13-week periods ended July 29, 2023 and July 30, 2022 , the Company recorded an income tax expense of approximately $ 650,000 , or ( 3.5 )% of the loss before income taxes compared to an expense of approximately $ 3.6 million, or ( 16.4 )% of the loss before income taxes, respectively. For the 26-week periods ended July 29, 2023 and July 30, 2022 , the Company recorded an income tax expense of approximately $ 2.0 million, or ( 6.8 )% of the loss before income taxes compared to an expense of approximately $ 298,000 , or ( 0.9 )% of the loss before income taxes, respectively. The change in income taxes for the 13-week and 26-week periods ended July 29, 2023, compared to the prior year period, was primarily due to valuation allowance adjustments and state income taxes. The Company recognizes deferred tax assets and liabilities using estimated future tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities, including net operating loss carry forwards. Management assesses the realizability of deferred tax assets and records a valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers the probability of future taxable income and our historical profitability, among other factors, in assessing the amount of the valuation allowance. Adjustments could be required in the future if the Company estimates that the amount of deferred tax assets to be realized is more than the net amount recorded. Any change in the valuation allowance could have the effect of increasing or decreasing the income tax provision in the statement of operations based on the nature of the deferred tax asset deemed realizable in the period in which such determination is made. As of July 29, 2023 and July 30, 2022 , the Company recorded a full valuation allowance against deferred tax assets.

(Loss) Earnings Per Share

(Loss) Earnings Per Share	6 Months Ended
	Jul. 29, 2023
Earnings Per Share [Abstract]
(Loss) Earnings Per Share	Note 4 – Loss Per Share Basic loss per share is computed by dividing net loss by the weighted average number of shares outstanding during each period presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares outstanding plus the dilutive effect of stock equivalents outstanding during the applicable periods using the treasury stock method. Diluted loss per share reflects the potential dilution that could occur if options to purchase stock were exercised into common stock and if outstanding grants of restricted stock were vested. Stock options and restricted stock units that were not included in the computation of diluted loss per share, because to do so would have been antidilutive, were approximately 793,000 shares and 471,000 shares for the 13-week periods ended July 29, 2023 and July 30, 2022 , respectively, and 697,000 shares and 630,000 shares for the 26-week periods ended July 29, 2023 and July 30, 2022, respectively.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jul. 29, 2023
Fair Value Disclosures [Abstract]
Fair Value Measurements	Note 5 – Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of their short maturities. The revolving line of credit approximates fair value due to the one, three or six-month interest terms. The Company also has a non-depleting collateral trust with the Company’s workers’ compensation and general liability insurance provider named as beneficiary. The assets in this trust are invested in financial instruments that would fall within Level 1 of the fair value hierarchy, and they are included in other assets on the consolidated balance sheets. The Company measures certain assets at fair value on a non-recurring basis, including the evaluation of long-lived assets for impairment using Company-specific assumptions, including forecasts of projected financial information that would fall within Level 3 of the fair value hierarchy. The Company uses market participant rents (Level 2 input) to calculate the fair value of right-of-use assets and discounted future cash flows of the asset or asset group using a discount rate that approximates the cost of capital of a market participant (Level 2 input) to quantify fair value for other long-lived assets.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 29, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 6 – Commitments and Contingencies The Company was named as a defendant in a putative class action filed in April 2017 in the United States District Court for the Western District of Pennsylvania, Gennock v. Kirkland’s, Inc. The complaint alleged that the Company, in violation of federal law, published more than the last five digits of a credit or debit card number on customers’ receipts and sought statutory and punitive damages and attorneys’ fees and costs. On October 21, 2019, the District Court dismissed the matter and ruled that the Plaintiffs did not have standing based on the Third Circuit’s recent decision in Kamal v. J. Crew Group, Inc., 918 F.3d 102 (3d. Cir. 2019). Following the dismissal in federal court, on October 25, 2019, the plaintiffs filed a Praecipe to Transfer the case to Pennsylvania state court, and on August 20, 2020, the court ruled that the plaintiffs have standing. The Company appealed that ruling, and on April 27, 2022, the Superior Court of Pennsylvania granted the Company’s petition for permission to appeal. On May 16, 2023, the Superior Court of Pennsylvania ruled that plaintiffs lacked standing under Pennsylvania law and dismissed plaintiffs’ complaint. The Company continues to believe that the case is without merit and will continue to vigorously defend itself in the event the Pennsylvania Supreme Court takes the case on appeal. The matter is covered by insurance, and the Company does not believe that the case will have a material adverse effect on its consolidated financial condition, operating results or cash flows. The Company was named as a defendant in a putative class action filed in May 2018 in the Superior Court of California, Miles v. Kirkland’s Stores, Inc. The case has been removed to United States District Court for the Central District of California. The complaint alleges, on behalf of Miles and all other hourly Kirkland’s employees in California, various wage and hour violations and seeks unpaid wages, statutory and civil penalties, monetary damages and injunctive relief. Kirkland’s denies the material allegations in the complaint and believes that its employment policies are generally compliant with California law. On March 22, 2022, the District Court denied the plaintiff’s motion to certify in its entirety, and on May 26, 2022, the Ninth Circuit granted the plaintiff’s petition for permission to appeal. The Court has stayed the entire case pending the appeal. The Company continues to believe the case is without merit and intends to vigorously defend itself against the allegations. The Company was named as a defendant in a putative class action filed in August 2022 in the United States District Court for the Southern District of New York, Sicard v. Kirkland’s Stores, Inc. The complaint alleges, on behalf of Sicard and all other hourly store employees based in New York, that Kirkland’s violated New York Labor Law Section 191 by failing to pay him and the putative class members their wages within seven calendar days after the end of the week in which those wages were earned, rather paying wages on a bi-weekly basis. Plaintiff claims the putative class is entitled to recover from the Company the amount of their untimely paid wages as liquidated damages, reasonable attorneys’ fees and costs. The Company believes the case is without merit and intends to vigorously defend itself against the allegations. The Company is also party to other pending legal proceedings and claims that arise in the normal course of business. Although the outcome of such proceedings and claims cannot be determined with certainty, the Company’s management is of the opinion that it is unlikely that such proceedings and any claims in excess of insurance coverage will have a material effect on its consolidated financial condition, operating results or cash flows

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jul. 29, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Note 7 – Stock-Based Compensation The Company maintains equity incentive plans under which it may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units, or stock appreciation rights to employees, non-employee directors and consultants. Compensation expense is recognized on a straight-line basis over the vesting periods of each grant. There have been no material changes in the assumptions used to compute compensation expense during the current year. The table below sets forth selected stock-based compensation information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations) $ 124 $ 617 $ 614 $ 1,165 Restricted stock units granted 72,660 119,400 374,440 359,800 Stock options granted — — 237,675 — During the 26-week period ended July 30, 2022 , the Company also granted performance-based restricted stock units (“PSUs”) that are subject to the achievement of specified performance goals over a specified performance period. The performance metrics for the PSUs were earnings before interest, taxes, depreciation and amortization (“EBITDA”) compared to target EBITDA and also included a relative shareholder return modifier. No shares were issued and no expense was recorded with respect to the PSUs granted in fiscal 2022, as the EBITDA performance condition was not probable of being achieved.

Share Repurchase Plan

Share Repurchase Plan	6 Months Ended
	Jul. 29, 2023
Treasury Stock Transactions [Abstract]
Share Repurchase Plan	Note 8 – Share Repurchase Plan On January 6, 2022, the Company announced that its Board of Directors authorized a share repurchase plan providing for the purchase in the aggregate of up to $ 30.0 million of the Company’s outstanding common stock. Repurchases of shares are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases are based on a variety of factors, including stock price, regulatory limitations and other market and economic factors. The share repurchase plan does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase plan at any time. As of July 29, 2023 , the Company had approximately $ 26.3 million remaining under the current share repurchase plan. The table below sets forth selected share repurchase plan information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, July 30, July 29, July 30, 2023 2022 2023 2022 Shares repurchased and retired — — — 479,966 Share repurchase cost $ — $ — $ — $ 6,253

Senior Credit Facility

Senior Credit Facility	6 Months Ended
	Jul. 29, 2023
Debt Disclosure [Abstract]
Senior Credit Facility	Note 9 – Senior Credit Facility On March 31, 2023, the Company entered into a Third Amended and Restated Credit Agreement (the “2023 Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent, and lender. The 2023 Credit Agreement amended the previous Second Amended and Restated Credit Agreement (the “2019 Credit Agreement”) from a $ 75.0 million senior secured revolving credit facility to a $ 90.0 million senior secured revolving credit facility. The 2023 Credit Agreement contains substantially similar terms and conditions as the 2019 Credit Agreement including a swingline availability of $ 10.0 million, a $ 25.0 million incremental accordion feature and extended its maturity date to March 2028. Advances under the 2023 Credit Agreement bear interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin ranging from 200 to 250 basis points with no SOFR floor. Upon the demonstration that the Company’s fixed charge coverage ratio is greater than 1.0 to 1.0 on a trailing twelve-month basis, the interest rate permanently decreases on the 2023 Credit Agreement to SOFR plus a margin of 150 to 200 basis points. Advances under the 2019 Credit Agreement bore interest at an annual rate equal to SOFR, or the London Interbank Offered Rate (“LIBOR”) through December 16, 2022, plus a margin ranging from 125 to 175 basis points with no SOFR or LIBOR floor. The fee paid to the lenders on the unused portion of the 2023 Credit Agreement is 25 basis points when usage is greater than 50% of the facility amount; otherwise, the fee on the unused portion is 37.5 basis points per annum. Under the 2019 Credit Agreement, the fee on the unused portion was 25 basis points per annum . Borrowings under the Credit Agreements are subject to certain conditions, and the Credit Agreements contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and certain events under the Employee Retirement Income Security Act of 1974 (“ERISA”). Upon any such event of default, the principal amount of any unpaid loans and all other obligations under the Credit Agreements may be declared immediately due and payable. The maximum availability under the Credit Agreements is limited by a borrowing base formula, which consists of a percentage of eligible inventory and eligible credit card receivables, less reserves. The Company is subject to a Second Amended and Restated Security Agreement (the “Security Agreement”) with Bank of America, N.A. Pursuant to the Security Agreement, the Company pledged and granted to the administrative agent, for the benefit of itself and the secured parties specified therein, a lien on and security interest in all of the rights, title and interest in substantially all of the Company’s assets to secure the payment and performance of the obligations under the Credit Agreements. As of July 29, 2023 , the Company was in compliance with the covenants in the 2023 Credit Agreement. Under the 2023 Credit Agreement, there were $ 46.0 million in outstanding borrowings and no letters of credit outstanding with approximately $ 26.1 million available for borrowing as of July 29, 2023.

Impairment

Impairment	6 Months Ended
	Jul. 29, 2023
Impairment [Abstract]
Impairment	N ote 10 – Impairment The Company evaluates the recoverability of the carrying amounts of long-lived assets when events or changes in circumstances dictate that their carrying values may not be recoverable. This review includes the evaluation of individual under-performing retail stores and the assessment of the recoverability of the carrying value of the assets related to the stores. Future cash flows are projected for the remaining lease life. If the estimated future cash flows are less than the carrying value of the assets, the Company records an impairment charge equal to the difference between the assets’ fair value and carrying value. The fair value is estimated using a discounted cash flow approach, considering such factors as future sales levels, gross margins, changes in rent and other expenses as well as the overall operating environment specific to that store. The amount of the impairment charge is allocated proportionately to all assets in the asset group with no asset written down below its individual fair value. The table below sets forth impairment information (in thousands, except store counts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Impairment of leasehold improvements, fixtures and equipment at stores $ 184 $ 228 $ 327 $ 228 Impairment of other long-lived assets (1) 817 — 899 — Total impairment $ 1,001 $ 228 $ 1,226 $ 228 Number of stores with leasehold improvements, fixtures and equipment impairment 1 2 3 2 (1) Other long-lived asset impairment includes the write-off of software costs and cloud computing implementation costs.

Subsequent Event

Subsequent Event	6 Months Ended
	Jul. 29, 2023
Subsequent Events [Abstract]
Subsequent Event	N ote 11 – Subsequent Event Subsequent to July 29, 2023 , the Company borrowed an additional $ 9.0 million under the 2023 Credit Agreement.

Description of Business and B_2

Description of Business and Basis of Presentation (Policies)	6 Months Ended
	Jul. 29, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	Nature of Business — Kirkland’s, Inc. (the “Company”, “we”, “our” or “us”) is a specialty retailer of home décor and furnishings in the United States operating 340 stores in 35 states as of July 29, 2023 , as well as an e-commerce website, www.kirklands.com, under the Kirkland’s Home brand.
Principles of consolidation	Principles of consolidation — The condensed consolidated financial statements of the Company include the accounts of Kirkland’s, Inc. and its wholly-owned subsidiaries, Kirkland’s Stores, Inc., Kirkland’s DC, Inc., and Kirkland’s Texas, LLC. Significant intercompany accounts and transactions have been eliminated.
Basis of presentation	Basis of presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and pursuant to the reporting and disclosure rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2023.
Fiscal year	Seasonality — The results of the Company’s operations for the 13-week and 26-week periods ended July 29, 2023 are not indicative of the results to be expected for any other interim period or for the entire fiscal year due to seasonality factors. Fiscal year — The Company’s fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. Accordingly, fiscal 2023 represents the 53 weeks ending on February 3, 2024 and fiscal 2022 represents the 52 weeks ended on January 28, 2023
Use of estimates	Use of estimates — The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than those at fiscal year-end. Changes in estimates are recognized in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include, but are not limited to, impairment assessments on long-lived assets, inventory reserves, self-insurance reserves and deferred tax asset valuation allowances.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jul. 29, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Gift Card Liability, Breakage and Redemption Information	The table below sets forth selected gift card liability information (in thousands) for the periods indicated: July 29, 2023 January 28, 2023 July 30, 2022 Gift card liability, net of estimated breakage (included in accrued expenses) $ 12,027 $ 14,077 $ 13,981 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Gift card breakage revenue (included in net sales) $ 304 $ 191 $ 1,335 $ 393 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 1,348 1,572 2,785 3,157

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jul. 29, 2023
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	The table below sets forth selected stock-based compensation information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations) $ 124 $ 617 $ 614 $ 1,165 Restricted stock units granted 72,660 119,400 374,440 359,800 Stock options granted — — 237,675 —

Share Repurchase Plan (Tables)

Share Repurchase Plan (Tables)	6 Months Ended
	Jul. 29, 2023
Treasury Stock Transactions [Abstract]
Schedule of Share Repurchase Plan Information	The table below sets forth selected share repurchase plan information (in thousands, except share amounts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, July 30, July 29, July 30, 2023 2022 2023 2022 Shares repurchased and retired — — — 479,966 Share repurchase cost $ — $ — $ — $ 6,253

Impairment (Tables)

Impairment (Tables)	6 Months Ended
	Jul. 29, 2023
Impairment [Abstract]
Schedule of Impairment Information	The table below sets forth impairment information (in thousands, except store counts) for the periods indicated: 13-Week Period Ended 26-Week Period Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Impairment of leasehold improvements, fixtures and equipment at stores $ 184 $ 228 $ 327 $ 228 Impairment of other long-lived assets (1) 817 — 899 — Total impairment $ 1,001 $ 228 $ 1,226 $ 228 Number of stores with leasehold improvements, fixtures and equipment impairment 1 2 3 2 (1) Other long-lived asset impairment includes the write-off of software costs and cloud computing implementation costs.

Description of Business and B_3

Description of Business and Basis of Presentation - Additional Information (Details)	Jul. 29, 2023 State Store
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of home decor and gifts store | Store	340
Number of states | State	35

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($)	Jul. 29, 2023	Jan. 28, 2023	Jul. 30, 2022
Revenue From Contract With Customer [Line Items]
Liability for sales returns	$ 1,300,000	$ 1,500,000	$ 1,400,000
Sales return reserve products recovery asset	636,000	705,000	742,000
Deferred e-commerce revenue	1,500,000	700,000	1,200,000
Contract assets in inventory	757,000	359,000	656,000
Customer Loyalty Program
Revenue From Contract With Customer [Line Items]
Deferred revenue	$ 1,000,000	$ 1,200,000	$ 1,000,000

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Gift Card Liability, Breakage and Redemption Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022	Jan. 28, 2023
Revenue from Contract with Customer [Abstract]
Gift card liability, net of estimated breakage (included in accrued expenses)	$ 12,027	$ 13,981	$ 12,027	$ 13,981	$ 14,077
Gift card breakage revenue (included in net sales)	304	191	1,335	393
Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period	$ 1,348	$ 1,572	$ 2,785	$ 3,157

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense	$ 650,000	$ 3,622,000	$ 2,010,000	$ 298,000
Effective tax rate	(3.50%)	(16.40%)	(6.80%)	(0.90%)

(Loss) Earnings Per Share - Add

(Loss) Earnings Per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Earnings Per Share [Abstract]
Stock options and restricted stock units not included in the computation of diluted (loss) earnings per share (in shares)	793,000	471,000	697,000	630,000

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 124	$ 617	$ 614	$ 1,165
Stock options granted	0	0	237,675	0
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted	72,660	119,400	374,440	359,800

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Details)	Jul. 29, 2023 shares
Performance Shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Equity instruments other than options estimated to vest in period	0

Share Repurchase Plan - Additio

Share Repurchase Plan - Additional Information (Details) - USD ($) $ in Millions	Apr. 29, 2023	Jan. 06, 2022
Treasury Stock Transactions [Abstract]
Share repurchase plan, authorized amount		$ 30
Share repurchase plan, remaining authorized amount	$ 26.3

Share Repurchase Plan - Schedul

Share Repurchase Plan - Schedule of Share Repurchase Plan Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 29, 2023	Jul. 30, 2022	Jul. 29, 2023	Jul. 30, 2022
Treasury Stock Transactions [Abstract]
Shares repurchased and retired	0	0	0	479,966
Share repurchase cost	$ 0	$ 0	$ 0	$ 6,253,000

Senior Credit Facility - Additi

Senior Credit Facility - Additional Information (Details) - USD ($) $ in Thousands		6 Months Ended
	Mar. 31, 2023	Jul. 29, 2023	Jan. 28, 2023	Jul. 30, 2022
Line of Credit Facility [Line Items]
Line of credit facility, interest rate description		Advances under the 2023 Credit Agreement bear interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin ranging from 200 to 250 basis points with no SOFR floor. Upon the demonstration that the Company’s fixed charge coverage ratio is greater than 1.0 to 1.0 on a trailing twelve-month basis, the interest rate permanently decreases on the 2023 Credit Agreement to SOFR plus a margin of 150 to 200 basis points. Advances under the 2019 Credit Agreement bore interest at an annual rate equal to SOFR, or the London Interbank Offered Rate (“LIBOR”) through December 16, 2022, plus a margin ranging from 125 to 175 basis points with no SOFR or LIBOR floor. The fee paid to the lenders on the unused portion of the 2023 Credit Agreement is 25 basis points when usage is greater than 50% of the facility amount; otherwise, the fee on the unused portion is 37.5 basis points per annum. Under the 2019 Credit Agreement, the fee on the unused portion was 25 basis points per annum
Revolving line of credit		$ 46,000	$ 15,000	$ 55,000
Revolving credit facility
Line of Credit Facility [Line Items]
Letters of credit outstanding, amount		$ 0
2019 Credit Agreement [Member] | Revolving credit facility
Line of Credit Facility [Line Items]
Percentage of fee on unused portion of the facility	0.25%
2019 Credit Agreement [Member] | Revolving credit facility | Minimum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.25%
2019 Credit Agreement [Member] | Revolving credit facility | Maximum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.75%
2023 Credit Agreements [Member] | Revolving credit facility
Line of Credit Facility [Line Items]
Percentage of fee on unused portion of the facility	0.25%	0.375%
2023 Credit Agreements [Member] | Revolving credit facility | Minimum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.50%	2%
Fixed charge coverage ratio		100%
2023 Credit Agreements [Member] | Revolving credit facility | Maximum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	2%	2.50%
Fixed charge coverage ratio		100%
Secured credit facility | Revolving credit facility
Line of Credit Facility [Line Items]
Swingline availability	$ 10,000
Incremental accordion feature	25,000
Revolving line of credit		$ 46,000
Available borrowing capacity of line of credit facility		$ 26,100
Secured credit facility | 2019 Credit Agreement [Member]
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity	75,000
Secured credit facility | 2023 Credit Agreements [Member] | Revolving credit facility
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity	$ 90,000

Impairment - Schedule of Impair

Impairment - Schedule of Impairment Information (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Jul. 29, 2023 USD ($) Store	Jul. 30, 2022 USD ($) Store	Jul. 29, 2023 USD ($) Store	Jul. 30, 2022 USD ($) Store
Impairment [Abstract]
Impairment of leasehold improvements, fixtures and equipment at stores		$ 184	$ 228	$ 327	$ 228
Impairment of other long-lived assets	[1]	817	0	899	0
Total impairment		$ 1,001	$ 228	$ 1,226	$ 228
Number of stores with leasehold improvements, fixtures and equipment impairment | Store		1	2	3	2
[1] Other long-lived asset impairment includes the write-off of software costs and cloud computing implementation costs.

Subsequent Event - Additional I

Subsequent Event - Additional Information (Details) $ in Millions	1 Months Ended
	Sep. 06, 2023 USD ($)
Subsequent Event [Member]
Subsequent Event [Line Items]
Additional amount borrowed under credit agreement	$ 9