Kirkland's (KIRK) 10-Q 1 Jun 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	May 01, 2021	May 21, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 1, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Registrant Name	Kirkland’s, Inc.
Entity Central Index Key	0001056285
Current Fiscal Year End Date	--01-29
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,252,579
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 Address, Postal Zip Code	37027
Entity Incorporation, State or Country Code	TN
City Area Code	615
Local Phone Number	872-4800
Title of 12(b) Security	Common Stock
Trading Symbol	KIRK
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	May 01, 2021	Jan. 30, 2021	May 02, 2020
Current assets:
Cash and cash equivalents	$ 72,275,000	$ 100,337,000	$ 30,140,000
Inventories, net	76,259,000	62,083,000	99,075,000
Income taxes receivable	107,000	162,000	22,014,000
Prepaid expenses and other current assets	8,638,000	8,116,000	7,950,000
Total current assets	157,279,000	170,698,000	159,179,000
Property and equipment:
Equipment	20,361,000	20,463,000	20,974,000
Furniture and fixtures	72,001,000	72,775,000	76,892,000
Leasehold improvements	108,307,000	109,501,000	116,311,000
Computer software and hardware	79,837,000	79,260,000	81,038,000
Projects in progress	2,049,000	1,429,000	2,316,000
Property and equipment, gross	282,555,000	283,428,000	297,531,000
Accumulated depreciation	(222,873,000)	(220,018,000)	(220,156,000)
Property and equipment, net	59,682,000	63,410,000	77,375,000
Operating lease right-of-use assets	142,003,000	147,334,000	183,789,000
Other assets	6,036,000	5,670,000	5,621,000
Total assets	365,000,000	387,112,000	425,964,000
Current liabilities:
Accounts payable	53,107,000	55,173,000	45,876,000
Accrued expenses	31,142,000	37,454,000	24,403,000
Operating lease liabilities	44,280,000	44,973,000	50,792,000
Total current liabilities	128,529,000	137,600,000	121,071,000
Operating lease liabilities	135,383,000	148,976,000	188,221,000
Revolving line of credit	0	0	40,000,000
Other liabilities	5,776,000	5,614,000	6,821,000
Total liabilities	269,688,000	292,190,000	356,113,000
Shareholders’ equity:
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at May 1, 2021, January 30, 2021, and May 2, 2020, respectively	0	0	0
Common stock, no par value; 100,000,000 shares authorized; 14,274,317; 14,292,250; and 14,014,503 shares issued and outstanding at May 1, 2021, January 30, 2021, and May 2, 2020, respectively	174,418,000	174,391,000	173,219,000
Accumulated deficit	(79,106,000)	(79,469,000)	(103,368,000)
Total shareholders’ equity	95,312,000	94,922,000	69,851,000
Total liabilities and shareholders’ equity	$ 365,000,000	$ 387,112,000	$ 425,964,000

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	May 01, 2021	Jan. 30, 2021	May 02, 2020
Statement Of Financial Position [Abstract]
Preferred stock, par value
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
Common stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Common stock, shares issued (in shares)	14,274,317	14,292,250	14,014,503
Common stock, shares outstanding (in shares)	14,274,317	14,292,250	14,014,503

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Income Statement [Abstract]
Net sales	$ 123,569	$ 77,247
Cost of sales	83,314	67,011
Gross profit	40,255	10,236
Operating expenses:
Compensation and benefits	19,113	18,578
Other operating expenses	17,165	14,567
Depreciation (exclusive of depreciation included in cost of sales)	1,613	1,501
Asset impairment	310	3,184
Total operating expenses	38,201	37,830
Operating income (loss)	2,054	(27,594)
Interest expense	85	220
Other income	(80)	(120)
Income (loss) before income taxes	2,049	(27,694)
Income tax expense (benefit)	330	(20,256)
Net income (loss)	$ 1,719	$ (7,438)
Earnings (loss) per share:
Basic	$ 0.12	$ (0.53)
Diluted	$ 0.11	$ (0.53)
Weighted average shares outstanding:
Basic	14,295	13,990
Diluted	15,445	13,990

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Accumulated Deficit
Balance, beginning of period at Feb. 01, 2020	$ 76,955	$ 172,885	$ (95,930)
Balance, beginning of period (in shares) at Feb. 01, 2020		13,955,826
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	0
Employee stock purchases	35	$ 35
Employee stock purchases (in shares)		34,999
Restricted stock issued		32,341
Net share settlement of stock options and restricted stock	(8)	$ (8)
Net share settlement of stock options and restricted stock (in shares)		(8,663)
Stock-based compensation expense	$ 307	$ 307
Repurchase and retirement of common stock (in shares)	0
Net income (loss)	$ (7,438)		(7,438)
Balance, end of period at May. 02, 2020	$ 69,851	$ 173,219	(103,368)
Balance, end of period (in shares) at May. 02, 2020	14,014,503	14,014,503
Balance, beginning of period at Jan. 30, 2021	$ 94,922	$ 174,391	(79,469)
Balance, beginning of period (in shares) at Jan. 30, 2021	14,292,250	14,292,250
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	$ 52	$ 52
Exercise of stock options (in shares)		10,669
Restricted stock issued		30,087
Net share settlement of stock options and restricted stock	(257)	$ (257)
Net share settlement of stock options and restricted stock (in shares)		(11,339)
Stock-based compensation expense	232	$ 232
Repurchase and retirement of common stock	$ (1,356)		(1,356)
Repurchase and retirement of common stock (in shares)	(47,350)	(47,350)
Net income (loss)	$ 1,719		1,719
Balance, end of period at May. 01, 2021	$ 95,312	$ 174,418	$ (79,106)
Balance, end of period (in shares) at May. 01, 2021	14,274,317	14,274,317

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Cash flows from operating activities:
Net income (loss)	$ 1,719	$ (7,438)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of property and equipment	5,272	6,053
Amortization of debt issue costs	23	24
Asset impairment	310	3,184
(Gain) loss on disposal of property and equipment	(4)	9
Stock-based compensation expense	232	307
Deferred income taxes	0	1,525
Changes in assets and liabilities:
Inventories, net	(14,176)	(4,401)
Prepaid expenses and other current assets	(522)	(1,488)
Accounts payable	(2,370)	(14,001)
Accrued expenses	(6,634)	(4,361)
Income taxes payable (receivable)	377	(21,780)
Operating lease assets and liabilities	(8,736)	5,627
Other assets and liabilities	(446)	(925)
Net cash used in operating activities	(24,955)	(37,665)
Cash flows from investing activities:
Proceeds from sale of property and equipment	13	98
Capital expenditures	(1,559)	(2,452)
Net cash used in investing activities	(1,546)	(2,354)
Cash flows from financing activities:
Borrowings on revolving line of credit	0	40,000
Cash used in net share settlement of stock options and restricted stock	(257)	(8)
Proceeds received from employee stock option exercises	52	0
Employee stock purchases	0	35
Repurchase and retirement of common stock	(1,356)	0
Net cash (used in) provided by financing activities	(1,561)	40,027
Cash and cash equivalents:
Net (decrease) increase	(28,062)	8
Beginning of the period	100,337	30,132
End of the period	72,275	30,140
Supplemental schedule of non-cash activities:
Non-cash accruals for purchases of property and equipment	$ 700	$ 2,217

Description of Business and Bas

Description of Business and Basis of Presentation	3 Months Ended
	May 01, 2021
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”) is a specialty retailer of home décor in the United States operating 370 stores in 35 states as of May 1, 2021, as well as an e-commerce website, www.kirklands.com. 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 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 March 26, 2021. Company response to novel coronavirus (“COVID-19”) pandemic — The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty and volatility which has affected the Company’s business operations in fiscal 2020 and fiscal 2021. The Company continues to closely monitor the impact of the COVID-19 pandemic on all facets of its business, which includes the impact on its employees, customers, suppliers, vendors, business partners and supply chain networks. All of the Company’s stores and distribution centers are currently open with enhanced safety measures. The health and safety of the Company’s employees and customers are the primary concerns of the Company’s management team. The Company has taken numerous actions to promote health and safety, including providing personal protective equipment to its employees, establishing mask protocols in its facilities, rolling out additional functionality to support contactless shopping experiences, implementing additional cleaning and sanitation procedures and promoting social distancing. During the 13-week period ended May 2, 2020, as a proactive and cautionary measure, the Company elected to borrow $40 million from its revolving credit facility, which was later repaid during the 13-week period ended August 1, 2020. The Company also temporarily closed all of its stores during the 13-week period ended May 2, 2020 and reopened stores during the 13-week period ended August 1, 2020. In an effort to further strengthen the Company’s financial flexibility and efficiently manage through the pandemic during the 13-week period ended May 2, 2020, the Company permanently reduced store and corporate payroll, temporarily furloughed store employees, cancelled inventory purchases, reduced capital expenditures and cut advertising, outbound freight and other expenses. The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was also signed into law during the 13-week period ended May 2, 2020. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferral of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act allowed the Company’s net operating losses incurred in fiscal 2019 to be carried back to preceding taxable years to generate a refund of previously paid income taxes of approximately $12.3 million that was received during the 13-week period ended August 1, 2020. As of May 1, 2021 and May 2, 2020, the Company had an income tax receivable of approximately $107,000 and $22.0 million, respectively. At both May 1, 2021 and May 2, 2020, the Company had a $1.4 million employer payroll tax credit receivable from the Internal Revenue Service (“IRS”) recorded in prepaid and other current assets. The Company also had deferred employer social security payroll taxes payable of $3.3 million recorded in accrued expenses as of May 1, 2021 and $201,000 recorded in other liabilities as of May 2, 2020. As of May 1, 2021 and May 2, 2020, the Company had $ 76.3 million and $ 99.1 million , respectively, in inventory. While the lower inventory levels are partially due to a lower store count, it also reflect s ongoing supply chain disruptions, port constraints and increased inbound freight costs due to the COVID-19 pandemic , which has slowed the flow of inventory receipts to the Company. Seasonality — The results of the Company’s operations for the 13-week period ended May 1, 2021 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 2021 represents the 52 weeks ending on January 29, 2022 and fiscal 2020 represents the 52 weeks ended on January 30, 2021. Use of estimates — 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. 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 of long-lived assets, inventory reserves, self-insurance reserves and deferred tax asset valuation allowances.

Revenue Recognition

Revenue Recognition	3 Months Ended
	May 01, 2021
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 had a liability of approximately $1.6 million and $481,000 reserved for sales returns at May 1, 2021 and May 2, 2020, respectively, included in accrued expenses on the condensed consolidated balance sheets. The related sales return reserve product recovery asset included in prepaid expenses and other current assets on the condensed consolidated balance sheets was approximately $709,000 and $218,000 at May 1, 2021 and May 2, 2020, respectively. Deferred e-commerce revenue — 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 and $1.9 million at May 1, 2021 and May 2, 2020, respectively. The related contract assets, reflected in inventory on the condensed consolidated balance sheets, totaled approximately $715,000 and $882,000 at May 1, 2021 and May 2, 2020, respectively. Gift cards — 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 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: May 1, 2021 January 30, 2021 May 2, 2020 Gift card liability, net of estimated breakage (included in accrued expenses) $ 12,586 $ 13,408 $ 12,374 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 13-Week Period Ended May 1, 2021 May 2, 2020 Gift card breakage revenue (included in net sales) $ 216 $ 157 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 2,080 1,679

Income Taxes

Income Taxes	3 Months Ended
	May 01, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Note 3 – 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, 2020, the Company was not able to use the estimated annual effective tax rate due to an inability to reliably estimate the annual effective tax rate; therefore, the actual effective tax rate for the period was used. For the 13-week period ended May 1, 2021, the Company was able to use the estimated annual effective tax rate. For the 13-week periods ended May 1, 2021 and May 2, 2020, the Company recorded income tax expense of 16.1% of income before income taxes and an income tax benefit of 73.1% of the loss before income taxes, respectively. The change in income taxes for the 13-week period ended May 1, 2021 compared to the prior year period was primarily due to recording a $12.3 million income tax benefit during the prior year period related to the carryback of the 2019 federal net operating loss to prior periods pursuant to the CARES Act and recording an additional income tax benefit of $3.8 million related to the carry back of the projected fiscal 2020 loss to years with a 35% statutory tax rate. 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 May 1, 2021 and May 2, 2020, the Company recorded a full valuation allowance against deferred tax assets.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	3 Months Ended
	May 01, 2021
Earnings Per Share [Abstract]
Earnings (Loss) Per Share	Note 4 – Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during each period presented. Diluted earnings (loss) per share is computed by dividing net income (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 earnings (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 earnings (loss) per share, because to do so would have been antidilutive, were approximately 50,000 shares and 1.2 million shares for the 13-week periods ended May 1, 2021 and May 2, 2020, respectively.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	May 01, 2021
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, other current assets and accounts payable approximate fair value because of their short maturities. The Company maintained The Executive Non-Qualified Excess Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan was funded, and the Company invested participant deferrals into trust assets, which were invested in a variety of mutual funds that were Level 1 inputs. The plan assets and plan liabilities were adjusted to fair value on a recurring basis. The Board of Directors approved the termination of the Deferred Compensation Plan effective September 6, 2019, and all remaining balances in the Deferred Compensation Plan were paid out during fiscal 2020. Deferred Compensation Plan assets and liabilities were zero and approximately $1.6 million as of May 1, 2021 and May 2, 2020, respectively, and were recorded in prepaid expenses and other current assets and accrued expenses in the condensed 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. See Note 10 –

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	May 01, 2021
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. 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. However, the court also certified the standing issue for an interlocutory appeal, and the Company has filed a petition for allowance of appeal with the Pennsylvania Supreme Court. The Company continues to believe that the case is without merit and intends to continue to vigorously defend itself against the allegations. 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 has been 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 Federal Court, Central District of California, and trial is currently set for January 24, 2022. The complaint alleges, on behalf of Miles and all other hourly Kirkland’s employees in California, various wage and hour violations. Kirkland’s denies the material allegations in the complaint and believes that its employment policies are generally compliant with California law. The parties are currently engaging in discovery, and the Plaintiff has until June 9, 2021 to file for class certification. 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	3 Months Ended
	May 01, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [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 May 1, 2021 May 2, 2020 Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations) $ 232 $ 307 Restricted stock units granted 119,663 980,421 Performance-based restricted stock units granted (a) 46,145 — (a) During the 13-week period ended May 1, 2021, the Company granted performance-based restricted stock units (“PSUs”) that are subject to the achievement of specified performance goals. The performance metrics for the PSUs are earnings before interest, taxes, depreciation and amortization (“EBITDA”) compared to budgeted EBITDA and also include a relative shareholder return modifier. The number of PSUs presented in the foregoing table represent the shares that can be achieved at the target-level of achievement of the applicable performance metrics. The actual number of shares that will be issued under the performance awards, which may be higher or lower than target, will be determined by the level of achievement of the performance goals and the total shareholder return modifier. During the 13-week period ended May 1, 2021, the Company recorded no compensation expense related to the performance-based units because actual EBITDA was lower than minimum target EBITDA under the award agreement. If the performance targets are achieved, the PSUs will be issued based on the achievement level and will cliff vest in full on February 3, 2024.

Share Repurchase Plan

Share Repurchase Plan	3 Months Ended
	May 01, 2021
Treasury Stock Transactions [Abstract]
Share Repurchase Plan	Note 8 – Share Repurchase Plan On September 24, 2018, the Company announced that its Board of Directors authorized a share repurchase plan providing for the purchase in the aggregate of up to $10 million of the Company’s outstanding common stock. This share repurchase plan was completed during the fourth quarter of fiscal 2020. On December 3, 2020, the Company announced that its Board of Directors authorized a new share repurchase plan providing for the purchase in the aggregate of up to $20 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 May 1, 2021, the Company had approximately $18.5 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 May 1, 2021 May 2, 2020 Shares repurchased and retired 47,350 — Share repurchase cost $ 1,356 $ —

Senior Credit Facility

Senior Credit Facility	3 Months Ended
	May 01, 2021
Debt Disclosure [Abstract]
Senior Credit Facility	Note 9 – Senior Credit Facility On December 6, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A. as administrative agent and collateral agent, and lender. The Credit Agreement contains a $75 million senior secured revolving credit facility, a swingline availability of $10 million, a $25 million incremental accordion feature and maturity date of December 2024. Advances under the Credit Agreement bear interest at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 125 to 175 basis points with no LIBOR floor, and the fee paid to the lender on the unused portion of the credit facility is 25 basis points per annum. Borrowings under the Credit Agreement are subject to certain conditions, and the Credit Agreement contains 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 Agreement may be declared immediately due and payable. The maximum availability under the Credit Agreement 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 its lender. 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 Agreement. As of May 1, 2021, the Company was in compliance with the covenants in the Credit Agreement. Under the Credit Agreement, there were no outstanding borrowings and $600,000 in letters of credit outstanding with approximately $48.7 million available for borrowing as of May 1, 2021.

Impairment

Impairment	3 Months Ended
	May 01, 2021
Impairment [Abstract]
Impairment	Note 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 assessing 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. During the 13-week periods ended May 1, 2021 and May 2, 2020, the Company recorded an impairment charge of approximately $310,000 and $2.2 million for leasehold improvements, fixtures and equipment at two stores and 16 stores, respectively, for which the carrying values exceed the respective fair value for these assets. The Company also recorded an impairment charge totaling $1.0 million for right-of-use assets at six stores for the 13-week period ended May 2, 2020. No impairment charge was recorded for right-of-use assets for the 13-week period ended May 1, 2021.

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	May 01, 2021
New Accounting Pronouncements And Changes In Accounting Principles [Abstract]
New Accounting Pronouncements	Note 11 – New Accounting Pronouncements New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 for non-accelerated filers, and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the LIBOR related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. generally accepted accounting principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements and related disclosures.

Description of Business and B_2

Description of Business and Basis of Presentation (Policies)	3 Months Ended
	May 01, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Nature of Business	Nature of Business — Kirkland’s, Inc. (the “Company”) is a specialty retailer of home décor in the United States operating 370 stores in 35 states as of May 1, 2021, as well as an e-commerce website, www.kirklands.com.
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 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 March 26, 2021.
Company Response to Novel Coronavirus (“COVID-19”)	Company response to novel coronavirus (“COVID-19”) pandemic — The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty and volatility which has affected the Company’s business operations in fiscal 2020 and fiscal 2021. The Company continues to closely monitor the impact of the COVID-19 pandemic on all facets of its business, which includes the impact on its employees, customers, suppliers, vendors, business partners and supply chain networks. All of the Company’s stores and distribution centers are currently open with enhanced safety measures. The health and safety of the Company’s employees and customers are the primary concerns of the Company’s management team. The Company has taken numerous actions to promote health and safety, including providing personal protective equipment to its employees, establishing mask protocols in its facilities, rolling out additional functionality to support contactless shopping experiences, implementing additional cleaning and sanitation procedures and promoting social distancing. During the 13-week period ended May 2, 2020, as a proactive and cautionary measure, the Company elected to borrow $40 million from its revolving credit facility, which was later repaid during the 13-week period ended August 1, 2020. The Company also temporarily closed all of its stores during the 13-week period ended May 2, 2020 and reopened stores during the 13-week period ended August 1, 2020. In an effort to further strengthen the Company’s financial flexibility and efficiently manage through the pandemic during the 13-week period ended May 2, 2020, the Company permanently reduced store and corporate payroll, temporarily furloughed store employees, cancelled inventory purchases, reduced capital expenditures and cut advertising, outbound freight and other expenses. The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was also signed into law during the 13-week period ended May 2, 2020. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferral of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act allowed the Company’s net operating losses incurred in fiscal 2019 to be carried back to preceding taxable years to generate a refund of previously paid income taxes of approximately $12.3 million that was received during the 13-week period ended August 1, 2020. As of May 1, 2021 and May 2, 2020, the Company had an income tax receivable of approximately $107,000 and $22.0 million, respectively. At both May 1, 2021 and May 2, 2020, the Company had a $1.4 million employer payroll tax credit receivable from the Internal Revenue Service (“IRS”) recorded in prepaid and other current assets. The Company also had deferred employer social security payroll taxes payable of $3.3 million recorded in accrued expenses as of May 1, 2021 and $201,000 recorded in other liabilities as of May 2, 2020. As of May 1, 2021 and May 2, 2020, the Company had $ 76.3 million and $ 99.1 million , respectively, in inventory. While the lower inventory levels are partially due to a lower store count, it also reflect s ongoing supply chain disruptions, port constraints and increased inbound freight costs due to the COVID-19 pandemic , which has slowed the flow of inventory receipts to the Company.
Fiscal year	Seasonality — The results of the Company’s operations for the 13-week period ended May 1, 2021 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 2021 represents the 52 weeks ending on January 29, 2022 and fiscal 2020 represents the 52 weeks ended on January 30, 2021.
Use of estimates	Use of estimates — 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. 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 of long-lived assets, inventory reserves, self-insurance reserves and deferred tax asset valuation allowances.
New Accounting Pronouncements Not Yet Adopted	New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. The new guidance applies to financial assets measured at amortized cost basis, including receivables that result from revenue transactions and held-to-maturity debt securities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 for non-accelerated filers, and early adoption is permitted for fiscal years beginning after December 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the LIBOR related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. generally accepted accounting principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements and related disclosures.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	May 01, 2021
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: May 1, 2021 January 30, 2021 May 2, 2020 Gift card liability, net of estimated breakage (included in accrued expenses) $ 12,586 $ 13,408 $ 12,374 The table below sets forth selected gift card breakage and redemption information (in thousands) for the periods indicated: 13-Week Period Ended May 1, 2021 May 2, 2020 Gift card breakage revenue (included in net sales) $ 216 $ 157 Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period 2,080 1,679

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	May 01, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [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 May 1, 2021 May 2, 2020 Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations) $ 232 $ 307 Restricted stock units granted 119,663 980,421 Performance-based restricted stock units granted (a) 46,145 — (a)

Share Repurchase Plan (Tables)

Share Repurchase Plan (Tables)	3 Months Ended
	May 01, 2021
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 May 1, 2021 May 2, 2020 Shares repurchased and retired 47,350 — Share repurchase cost $ 1,356 $ —

Description of Business and B_3

Description of Business and Basis of Presentation - Additional Information (Details)	3 Months Ended
	May 01, 2021USD ($)storestate	Aug. 01, 2020USD ($)	May 02, 2020USD ($)	Jan. 30, 2021USD ($)
Organization Consolidation and Presentation of Financial Statements [Line Items]
Number of home decor and gifts store | store	370
Number of states | state	35
Borrowings on revolving line of credit	$ 0		$ 40,000,000
Refund of previously paid income taxes under CARES Act		$ 12,300,000
Income taxes receivable	107,000		22,014,000	$ 162,000
Inventory	76,259,000		99,075,000	$ 62,083,000
Internal Revenue Service
Organization Consolidation and Presentation of Financial Statements [Line Items]
Employer payroll tax credit receivable included in prepaid and other current assets	1,400,000		1,400,000
Other Liabilities
Organization Consolidation and Presentation of Financial Statements [Line Items]
Deferred employer social security payroll taxes payable			$ 201,000
Accrued Expenses
Organization Consolidation and Presentation of Financial Statements [Line Items]
Deferred employer social security payroll taxes payable	$ 3,300,000

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Details) - USD ($)	May 01, 2021	May 02, 2020
Revenue From Contract With Customer [Line Items]
Liability for sales returns	$ 1,600,000	$ 481,000
Sales return reserve product recovery asset	709,000	218,000
Deferred e-commerce revenue	1,500,000	1,900,000
Contract assets in inventory	715,000	882,000
Customer Loyalty Program
Revenue From Contract With Customer [Line Items]
Deferred revenue	$ 1,200,000	$ 0

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Gift Card Liability, Breakage and Redemption Information (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020	Jan. 30, 2021
Revenue From Contract With Customer [Abstract]
Gift card liability, net of estimated breakage (included in accrued expenses)	$ 12,586	$ 12,374	$ 13,408
Gift card breakage revenue (included in net sales)	216	157
Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period	$ 2,080	$ 1,679

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	May 01, 2021	May 02, 2020
Income Tax Disclosure [Abstract]
Effective tax rate	16.10%	(73.10%)
Income tax benefit related to the carryback of the 2019 federal net operating loss to prior periods pursuant to the CARES Act	$ 12.3
Additional income tax benefit related to the carryback of the projected fiscal 2020 loss to years with a 35% statutory tax rate	$ 3.8
Statutory tax rate	35.00%

Earnings (Loss) Per Share - Add

Earnings (Loss) Per Share - Additional Information (Details) - shares	3 Months Ended
	May 01, 2021	May 02, 2020
Earnings Per Share [Abstract]
Stock options and restricted stock units not included in the computation of diluted earnings (loss) per share (in shares)	50,000	1,200,000

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($)	May 01, 2021	May 02, 2020
Fair Value Disclosures [Abstract]
Deferred compensation plan assets	$ 0	$ 1,600,000
Deferred compensation plan liabilities	$ 0	$ 1,600,000

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense (included in compensation and benefits on the condensed consolidated statements of operations)	$ 232	$ 307
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted	119,663	980,421
Performance-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted	46,145

Stock-Based Compensation - St_2

Stock-Based Compensation - Stock-Based Compensation (Details) (Parenthetical)	3 Months Ended
	May 01, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Percentage of targets level shares achievement by performance based on target shares granted	100.00%

Share Repurchase Plan - Additio

Share Repurchase Plan - Additional Information (Details) - USD ($)	May 01, 2021	Dec. 03, 2020	Sep. 24, 2018
Treasury Stock Transactions [Abstract]
Share repurchase plan, authorized amount		$ 20,000,000	$ 10,000,000
Share repurchase plan, remaining authorized amount	$ 18,500,000

Share Repurchase Plan - Schedul

Share Repurchase Plan - Schedule of Share Repurchase Plan Information (Details) - USD ($) $ in Thousands	3 Months Ended
	May 01, 2021	May 02, 2020
Treasury Stock Transactions [Abstract]
Shares repurchased and retired	47,350	0
Share repurchase cost	$ 1,356	$ 0

Senior Credit Facility - Additi

Senior Credit Facility - Additional Information (Details) - USD ($)	3 Months Ended
	May 01, 2021	Jan. 30, 2021	May 02, 2020
Line of Credit Facility [Line Items]
Revolving line of credit	$ 0	$ 0	$ 40,000,000
Revolving credit facility
Line of Credit Facility [Line Items]
Percentage of fee on unused portion of the facility	0.25%
Letters of Credit Outstanding, Amount	$ 600,000
Revolving credit facility | Minimum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.25%
Revolving credit facility | Maximum
Line of Credit Facility [Line Items]
Interest at an annual rate equal to LIBOR plus a margin range	1.75%
Secured credit facility | Revolving credit facility
Line of Credit Facility [Line Items]
Line of credit facility maximum borrowing capacity	$ 75,000,000
Swingline availability	10,000,000
Incremental accordion feature	25,000,000
Revolving line of credit	0
Available borrowing capacity of line of credit facility	$ 48,700,000

Impairment - Additional Informa

Impairment - Additional Information (Details)	3 Months Ended
	May 01, 2021USD ($)store	May 02, 2020USD ($)store
Impaired Long-Lived Assets Held and Used [Line Items]
Impairment of operating lease right-of-use assets	$ 0	$ 1,000,000
Impairment of leasehold improvements, fixtures, and equipment	310,000	2,200,000
Impairment net of tax	$ 234,000	$ 2,400,000
Right of Use Asset
Impaired Long-Lived Assets Held and Used [Line Items]
Number of store locations with impairment | store		6
Property and Equipment
Impaired Long-Lived Assets Held and Used [Line Items]
Number of store locations with impairment | store	2	16