Kirkland's (KIRK) 10-Q 11 Jun 15 2016 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	2-May-15	Jun. 04, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	FALSE
Document Period End Date	2-May-15
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	KIRK
Entity Registrant Name	KIRKLAND'S, INC
Entity Central Index Key	1056285
Current Fiscal Year End Date	-29
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,294,788

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	2-May-15	Jan. 31, 2015	3-May-14
In Thousands, unless otherwise specified
Current assets:
Cash and cash equivalents	$93,437	$99,138	$82,418
Inventories, net	58,291	55,775	50,702
Deferred income taxes	3,614	3,538	2,857
Prepaid expenses and other current assets	8,343	8,878	8,595
Total current assets	163,685	167,329	144,572
Property and equipment, net	88,433	90,992	82,768
Other assets	2,283	2,166	2,028
Total assets	254,401	260,487	229,368
Current liabilities:
Accounts payable	26,072	24,705	19,465
Income taxes payable	191	5,648	866
Accrued expenses	24,655	27,027	22,870
Total current liabilities	50,918	57,380	43,201
Deferred rent	41,057	41,995	39,435
Non-current deferred income taxes	4,049	4,138	3,239
Other liabilities	5,960	5,912	5,495
Total liabilities	101,984	109,425	91,370
Shareholders' equity:
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at May 2, 2015, January 31, 2015, or May 3, 2014, respectively
Common stock, no par value; 100,000,000 shares authorized; 17,248,267; 17,127,875; and 17,309,423 shares issued and outstanding at May 2, 2015, January 31, 2015, and May 3, 2014, respectively	159,584	159,015	156,907
Accumulated deficit	-7,167	-7,953	-18,909
Total shareholders' equity	152,417	151,062	137,998
Total liabilities and shareholders' equity	$254,401	$260,487	$229,368

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	2-May-15	Jan. 31, 2015	3-May-14
Statement of Financial Position [Abstract]
Preferred stock, par value
Preferred stock, shares authorized	10,000,000	10,000,000	10,000,000
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding	0	0	0
Common stock, par value
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	17,248,267	17,127,875	17,309,423
Common stock, shares outstanding	17,248,267	17,127,875	17,309,423

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	2-May-15	3-May-14
Income Statement [Abstract]
Net sales	$118,310	$108,255
Cost of sales (exclusive of depreciation as shown below)	70,647	65,653
Gross profit	47,663	42,602
Operating expenses:
Compensation and benefits	23,213	21,279
Other operating expenses	15,124	13,664
Depreciation	5,229	4,300
Total operating expenses	43,566	39,243
Operating income	4,097	3,359
Interest expense, net	70	69
Other income, net	-55	-82
Income before income taxes	4,082	3,372
Income tax expense	1,553	1,317
Net income	$2,529	$2,055
Earnings per share:
Basic	$0.15	$0.12
Diluted	$0.14	$0.12
Weighted average shares for basic earnings per share:	17,238	17,308
Effect of dilutive stock equivalents	567	517
Adjusted weighted average shares for diluted earnings per share	17,805	17,825

Condensed_Consolidated_Stateme1

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $)	Total	Common Stock [Member]	Accumulated Deficit [Member]
In Thousands, except Share data
Beginning Balance at Jan. 31, 2015	$151,062	$159,015	($7,953)
Beginning Balance, shares at Jan. 31, 2015		17,127,875
Exercise of employee stock options and employee stock purchases	74	74
Exercise of employee stock options and employee stock purchases, shares		413,335
Tax benefit from exercise of stock options	815	815
Net share settlement of stock options and restricted stock units	-1,556	-1,556
Net share settlement of stock options and restricted stock units, shares		-248,197
Issuance of restricted stock	0	0	0
Issuance of restricted stock, shares		30,000
Stock-based compensation expense	1,236	1,236
Repurchase and retirement of common stock	-1,743		-1,743
Repurchase and retirement of common stock, shares		-74,746
Net income	2,529		2,529
Ending Balance at May. 02, 2015	$152,417	$159,584	($7,167)
Ending Balance, shares at May. 02, 2015		17,248,267

Condensed_Consolidated_Stateme2

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	2-May-15	3-May-14
Cash flows from operating activities:
Net income	$2,529	$2,055
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation of property and equipment	5,229	4,300
Amortization of landlord construction allowances	-1,546	-1,456
Amortization of debt issue costs	19	19
Loss on disposal of property and equipment	5	191
Cash received for landlord construction allowances	2,460	2,234
Stock-based compensation expense	1,236	637
Excess tax benefits from exercise of stock options and restricted stock	-815
Deferred income taxes	-165	-178
Changes in assets and liabilities:
Inventories, net	-2,516	1,935
Prepaid expenses and other current assets	-1,461	25
Other noncurrent assets	-136	-209
Accounts payable	1,367	-3,637
Income taxes receivable / payable	-4,653	-5,076
Accrued expenses and other current and noncurrent liabilities	-2,169	-619
Net cash (used in) provided by operating activities	-616	221
Cash flows from investing activities:
Capital expenditures	-2,675	-6,930
Net cash used in investing activities	-2,675	-6,930
Cash flows from financing activities:
Excess tax benefits from exercise of stock options and restricted stock	815
Cash used in net share settlement of stock options and restricted stock	-1,556
Employee stock purchases	74	77
Repurchase and retirement of common stock	-1,743
Net cash (used in) provided by financing activities	-2,410	77
Cash and cash equivalents:
Net decrease	-5,701	-6,632
Beginning of the period	99,138	89,050
End of the period	$93,437	$82,418

Basis_of_Presentation

Basis of Presentation	3 Months Ended
	2-May-15
Accounting Policies [Abstract]
Basis of Presentation	Note 1 — Basis of Presentation
	Kirkland’s, Inc. (the “Company”) is a specialty retailer of home décor and gifts with 342 stores in 35 states as of May 2, 2015. 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., Kirkland’s Texas, LLC, and Kirklands.com, LLC. All intercompany accounts and transactions have been eliminated.
	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete financial statements. 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 Securities and Exchange Commission on April 14, 2015.
	It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than those at fiscal year-end. In addition, because of seasonality factors, the results of the Company’s operations for the 13-week period ended May 2, 2015 are not indicative of the results to be expected for any other interim period or for the entire fiscal year. The Company’s fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. All references to a fiscal year refer to the fiscal year ending on the Saturday closest to January 31 of the following year.
	The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States 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.
	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, asset retirement obligations, inventory reserves, self-insurance reserves, income tax liabilities, stock-based compensation, employee bonus accruals, gift card breakage, sales return reserves, customer loyalty program accruals and contingent liabilities.

Income_Taxes

Income Taxes	3 Months Ended
	2-May-15
Income Tax Disclosure [Abstract]
Income Taxes	Note 2 — Income Taxes
	An estimate of the annual effective tax rate is used at each interim period based on the facts and circumstances available at that time, while the actual effective tax rate is calculated at year-end. For the 13-week period ended May 2, 2015, the Company recorded an income tax expense of 38.0% of pre-tax income. In the prior year period, the Company recorded an income tax expense of 39.1% of pre-tax income.

Earnings_Per_Share

Earnings Per Share	3 Months Ended
	2-May-15
Earnings Per Share [Abstract]
Earnings Per Share	Note 3 — Earnings Per Share
	Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during each period presented, which excludes non-vested restricted stock units. Diluted earnings per share is computed by dividing net income 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 earnings 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 earnings per share, because to do so would have been antidilutive, were 0 and 414,000 shares for the 13-week periods ended May 2, 2015, and May 3, 2014, respectively.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	2-May-15
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 4 — Commitments and Contingencies
	The Company is party to pending legal proceedings and claims. 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 these proceedings and any claims in excess of insurance coverage will have a material effect on the financial condition, operating results or cash flows of the Company.

StockBased_Compensation

Stock-Based Compensation	3 Months Ended
	2-May-15
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Note 5 — 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.
	No stock options or restricted stock units were granted during the 13-week period ended May 2, 2015. Total stock-based compensation expense (a component of compensation and benefits) was $1.2 million for the 13-week period ended May 2, 2015, compared to $637,000 for the comparable prior year period. Included in the 13-week period ended May 2, 2015 is $600,000 of stock-based compensation expense that resulted from the accelerated vesting of stock options and restricted stock units upon the retirement of the Company’s former Chief Executive Officer. Compensation expense is recognized on a straight-line basis over the vesting periods of each grant. There have been no other material changes in the assumptions used to compute compensation expense during the current quarter.

Related_Party_Transactions

Related Party Transactions	3 Months Ended
	2-May-15
Related Party Transactions [Abstract]
Related Party Transactions	Note 6 — Related Party Transactions
	In July 2009, the Company entered into an agreement with a related party vendor to purchase merchandise inventory. The vendor is considered a related party for financial reporting purposes because its principal is the spouse of the Company’s Vice President of Merchandising. During the 13-week periods ended May 2, 2015 and May 3, 2014, purchases from this vendor totaled approximately $7.1 million, or 12.7% of total merchandise purchases, and $5.7 million, or 12.1% of merchandise purchases, respectively. Included in cost of sales for the 13-week periods ended May 2, 2015 and May 3, 2014 were $6.4 million and $5.8 million, respectively, related to this vendor. Payable amounts outstanding to this vendor were approximately $2.9 million and $1.3 million as of May 2, 2015 and May 3, 2014, respectively. The Company’s payable terms with this vendor are consistent with the terms offered by other vendors in the ordinary course of business.

Stock_Repurchase_Program

Stock Repurchase Program	3 Months Ended
	2-May-15
Equity [Abstract]
Stock Repurchase Program	Note 7 — Stock Repurchase Program
	On May 22, 2014, the Company announced that its Board of Directors authorized a stock repurchase plan providing for the purchase in the aggregate of up to $30 million of the Company’s outstanding common stock from time to time until May 2016. Through May 2, 2015, the Company repurchased and retired approximately 343,000 shares of common stock at an aggregate cost of approximately $6.5 million under this repurchase plan. As of May 2, 2015, the Company had $23.5 million remaining under the Board of Director’s current authorization to repurchase its common stock. Subsequent to May 2, 2015, the Company has repurchased and retired approximately 22,000 shares of common stock at an aggregate cost of $531,000.

New_Accounting_Pronouncement

New Accounting Pronouncement	3 Months Ended
	2-May-15
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncement	Note 8 — New Accounting Pronouncement
	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers.” Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This update will be effective for the Company at the beginning of its fiscal 2018 year. The Company is still evaluating the impact the adoption of ASU 2014-09 will have on its consolidated financial statements.

Subsequent_Event

Subsequent Event	3 Months Ended
	2-May-15
Subsequent Events [Abstract]
Subsequent Event	Note 9 — Subsequent Event
	On May 21, 2015, the Company announced that its Board of Directors authorized a special cash dividend of $1.50 per share on its common stock. The special dividend will be paid on June 19, 2015 to stockholders of record as of the close of business on June 5, 2015.

Basis_of_Presentation_Addition

Basis of Presentation - Additional Information (Detail)	2-May-15
	State
	Store
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of home decor and gifts store	342
Number of states	35

Income_Taxes_Additional_Inform

Income Taxes - Additional Information (Detail)	3 Months Ended
	2-May-15	3-May-14
Income Tax Disclosure [Abstract]
Income tax expense as percentage of pre-tax income	38.00%	39.10%

Earnings_Per_Share_Additional_

Earnings Per Share - Additional Information (Detail)	3 Months Ended
	2-May-15	3-May-14
Earnings Per Share [Abstract]
Stock options not included in the computation of diluted earnings per share	0	414,000

StockBased_Compensation_Additi

Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended
	2-May-15	3-May-14
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	0
Stock-based compensation expense	$1,236,000	$637,000
Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation accelerated expense	$600,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted	0

Related_Party_Transactions_Add

Related Party Transactions - Additional Information (Detail) (Merchandise Inventory Purchase [Member], USD $)	3 Months Ended
In Millions, unless otherwise specified	2-May-15	3-May-14
Related Party Transaction [Line Items]
Purchase from related party vendor as percentage of total merchandise purchases	12.70%	12.10%
Vendor [Member]
Related Party Transaction [Line Items]
Purchase from related party vendor	7.1	5.7
Cost of sale related to vendor	6.4	5.8
Payable amounts outstanding to vendor	2.9	1.3

Stock_Repurchase_Program_Addit

Stock Repurchase Program - Additional Information (Detail) (USD $)	3 Months Ended	11 Months Ended	1 Months Ended
	2-May-15	2-May-15	Jun. 11, 2015	22-May-14
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, Expiration date	31-May-16
Repurchase and retirement of common stock, shares		343,000
Repurchase and retirement of common stock	$1,743,000	$6,500,000
Stock repurchase program, remaining authorized repurchase amount	23,500,000	23,500,000
Subsequent Event [Member]
Equity, Class of Treasury Stock [Line Items]
Repurchase and retirement of common stock, shares			22,000
Repurchase and retirement of common stock			531,000
Maximum [Member]
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, Authorized amount				$30,000,000

Subsequent_Event_Additional_In

Subsequent Event - Additional Information (Detail) (Subsequent Event [Member], USD $)	0 Months Ended
	21-May-15	21-May-15
Subsequent Event [Member]
Subsequent Event [Line Items]
Cash dividend authorized	$1.50	$1.50
Dividend payable date	19-Jun-15
Dividend payable date of record	5-Jun-15