KIRK - Earnings call transcript Q4 2021

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Operator

Good morning, everyone. And thank you for participating in today's conference call to discuss Kirkland's Financial Results for the Fourth Quarter and Full Year ended January 29, 2022.

Joining us today are Kirkland's President and CEO, Steve Woody Woodward; COO and CFO, Nicole Strain; and the company's external Director of Investor Relations, Cody Cree.

Following their remarks, we'll open the call for your questions.

Before we go further, I would like to turn the call over to Mr. forward-looking the Private Harbor of Securities provides cautions reads meaning within XXXX he important the of Litigation regarding as company's statement Safe the that Cree statements. Reform Act Cody, please go ahead.

Cody Cree

statements the for Reform Except Act Securities forward-looking during call, management information Thanks, provision made pursuant of Betsy. company to historical by made Litigation harbor this of discussed conference XXXX. the safe and Private are the

future described Kirkland's periods and known risks remind uncertainties, press actual unknown Web site forecasted through via results as cause Those be to available available Securities are company's in that XXXX. release, be filings on differ Forward-looking and link statements involve the will I'd will for March the results. to which and Exchange in from in materially provided as also like the uncertainties may replay well Commission. with today's this A everyone and risks at more Kirkland's call XX, webcast kirklands.com. replay fully

Now to turn to over Steve and call I would President Woodward. over you. like to CEO, Woody, Kirkland's the

Steve Woodward

everyone. Thank Cody morning, good and you,

been I'd year like to the stakeholders executing and least, the long-term at of dedicated up that a the In in cannot products executing employees home a controlling year, This our first pace war Ukraine. quality, fight in continue that true you price transform commitment. the challenging given furnishings unrest normal all times. to into Kirkland's of As series points. always, of and unknowns believe recognize to all high I'm support our taken inflation strategy. current transformation to the the retailer incredibly at I macro goals style our specialty meaningful affordable high control challenging steps pandemic, come has to stepping with dedication we've social your a efforts past enough in everyone to high can in with things now and been expectations past our my and for environment, and the across the even exceeding of what has say thank strategic and proud we country,

diversifying product sourcing capabilities our healthy us strong direct Our in position and mix, our improving a for a made put have future. advances in infrastructure reinforcing our

we've look back our we than our we at realize we customer As ability the base, merchandise to progress and necessary have the to made, efforts driven make may customer migrate our faster changes and experience infrastructure. transformation

it ever increasing the that which always was we can quality value in on box traffic a in home end and for why from budget. stores the at we of believe of. consumer low create less. online big discernible of shopping offered the suffered stores. XX% everyone customer and was our larger we to the We no We We our wavering had customer growing selection brand proud pace have higher From of brick the will of to brand consumer. margins strongly. number intention macro a We we the afford target much higher and up. increased and a promotional overall had so here growing I'd with are view also do time result, that exclusive having unprofitable We offerings like merchandise continuing retailers, our since a believe base, continue compete as why to strategy, is to to sales discounts, resulting evolving not shifting constraints of a allow While change long-term. quality, find believe even a making our and product from same brick were on to mortar merchandise we on our within The option weren't commodity place for we sourcing obvious footprint We with perspective online the we believe where an alter also traffic. in an on merchandise mortar customers and and difficult and high customer the retailer a and efforts high customer market, backwards and impact a perspective, where ticket the effect that home profitability allow end retailers, remind mix our time, furnish were point that transformation that sets, And more environment we a catch their style or experience grow in style market. but to intend could comes acquisition tangible declining. of sales At We I to we our way persistent into with us will believe expensive can’t we in our be can looks we Based seem curated a we're our look exaggerated whitespace our already were we customers store elevation. decline. be can could Kirkland's, market and believe transmit awareness. the business broader the successful and -- this why on the transition joined product furnishings lost When be less going specialty initially in but this XX% value believe entire a comparable a wants environment. customer to to from to

higher Additionally, we the with exclusive, believe discounts. merchandise sell can less we quality to continue

solidified changes one our we've a in years, to made we meaningful transformation. foundation can support profitability that few infrastructure, our expenses, past operating removing the in lot a including have from Through while improving million $XX and changes our of Over build significantly. these

along portion successful clear offerings, We've large A We textiles, serving view lost brand didn't and with those upgrading have an did meaningful of base purchase of only point focus of customer, new deep sales. been a we've the a Yes. are those We've efforts. in that and portion loves in on larger money a that customer seen seen customers, generate furniture we is from the success and accessories make base had and the a Have a creating customers. we ticket customer has so our moving very underserved our mirrors. these We decorative discount? and fragrances. in progress Have did at but us Yes.we way? product. products customers we

Additionally, we they closed over XX% of money, generate but base. did our store stores make didn't sales. Those

right to in So the money made end, the and we returning making a shareholders. on decisions profit long-term our focused

Last each So aim customer retailers their $X,XXX to why in shifted $X,XXX. somewhere expected? year focus range our that effort, instead customers with of up to slower the which going acquisition spend is we ramping it than year of choice target

efforts saw started happy middle challenges spending. the a the consumer with issues of the discretionary season, holiday Then by year, we supply we in results. these chain fiscal dampen macroeconomic start However, the to impacted and weren't

in solve? As during a markets times, we these This our to customers, our Do mass hit we have without legacy in uncertain test of beginning the and customers, at can new our Of two are will recognize include potential we test our result, and believe to meaningful offer branding our course. begin other market an if an sales home the target transform taking to will of things to of front home we media in has not alternate taking our once true it while the awareness markets. significant exciting a rebranding. near-term. key all are Instead approach. to put of April, of Kirkland's aiming abandoning Kirkland's company brand marketing We in

consistently our quality our we have has to existing improved. For customers, prove that

our footprint, store improvements to our in to to make have online infrastructure. our We supply chain experience and

we execute needs. these have We each without can or a believe the roadmap for profitability impacting significantly and of capital

mentioned will each continue execution these to us to and to above, Meanwhile, through current we challenges. adjusting merchandise the As allow focus are on we improvements areas. managing the accelerate in macroeconomic of case day-to-day

a in Finally, own continue back to shareholder will buying return. as opportunistic to means maximize we our be shares

we performance in we late the season, critical selling increased which and sales during during sales products and arriving were merchandise led As our clearance at impacted holiday January. November our challenged December, by fourth to in look quarter,

inventory million we As Christmas of that holiday related we XXXX. a plan holding X in sell to result, are in approximately

able we in would've the and in I with some XX% quarter. a are XXXX. year-over-year line into the Diving certainly results, well to different financials had furniture sales, While increase expectations December mirrors by AUR for to we our We were in as were in report highlights in liked announced a sales lighting. revised as that increase see which large

year. our favorable anticipate product category product customer Within the higher also overall Our better a AUR category all our and furniture this further increased best from benefit larger benefited offers categories offerings and We interest. percentage offerings our percentage the mix, as of become we AUR than prior generate options a of channel, within we our mix more selling a larger across mix. to e-commerce more

transformation furnishings and progress As anticipate us confidence necessary year, inventory early ensure but to start in-depth and being generate Nicole we give more have strategy, provide merchandise of and the first I macroeconomic successes we currently the for high set of want results the We XXXX with fourth we performance half where up the goal made of driving we traffic that stocked growth evolve channel. AUR a in sell year. a furniture hard improvements to will ultimately beyond. we category more seeing entire that At as and continue our conversion ourselves within e-commerce to specialty and center I'll meaningful let these higher our surprises in the have Kirkland's review our rhythm. started quarter our largest transformation in our been were retailer. to in about of this home organization what reclaiming year our sit we this last model don't category into plenty financial success how moment. of the amount like I'd With overshadow our for But year There excited for we to to evolve the on environment is to the within that nuances working and are the a have strategy. in has we furniture of a focus XXXX within strategy that fiscal the overall

running throughout As sell. a be we don't inventory the footed to strong industry, products we by it to constrains a caught have of out position get in made supply continued flat priority so

out offerings we month. position, our that we new have our roll in furniture this confident started Now are to inventory

and great furniture initial over of major first to potential our and consumer. offering indicator the events we received. the Kirkland’s. have get pleased held how To This is transformative we of customer succeed, with be weeks, feedback the right few that were past this we we furniture can truly category fact, our In the to it with a

positive we've far, so had feedback. but And nothing

we this, new need and steps these accomplish addition, Kirkland style offerings, aware consumer and are to In and living to several looking awareness. of furniture thinking taking furnish customers acquisition we drive are of space. to a ensure that when To

I meaningful earlier awareness April in mentioned drive advertising key we launch Atlanta, and markets, conversion. As in improvements two traffic generate and brand Nashville will and to in tests

to our drive consumers channels. we a store will begin success advertising similar As broader see to campaign, scale out further roll we start and more regional within more strategies these on to e-commerce to in

updating by we branding, We've of already a we first and better efforts touch stores line in have main launching Kirkland's rebranding in spoken we've and to initiatives half, is we be the that points and want end One home, customers these transition but of the view to past us. to where to our is and begun effort online. marketing which most aim how the we'll the believe signage

and advertising and all across going the efforts, focus a positive our experience it's throughout competitive have bolstering consumers on to imperative addition we're In environment, In omnichannel investing today's channels. experience year. the that marketing to also

customer, are service. version track they One home. to of from personally must piece options our Within of most initiatives introducing retailer that have move live item glove larger have And which cases, consumers. is which be value our Currently, home items deliver many in in if is delivery, furniture customer an accomplish a is a the for white in available orders store, finally home back furniture to we furniture capability we can for the delivery the on store a to deliveries, focused their important aren't near-term to the don't to a to near store. a directly larger attractive the need choice of to customers who service these

sell us offerings will investments that launching these better our we experience, out key customers. data behavior. decision-making in throughs customers’ new to help traffic improve and roll This and will furniture best strategies the our in an further and with be store generate evaluate meaningful process we make as in and customer to understand customer the and also internal platform be we track will As test online line, drive

to acquired than existing customers Additionally, differently it newly message ability customers. allows the us

we per we're success ticket revenues scale focused reliant and our generates. was Average goal into this increases make first our size commanding our furniture major KPIs. on higher of season our furniture push to decor start category to in so of two evolving and our the merchandise on average offering. so holiday of customer with As in historical into rationale pieces gauge we meaningful to aren't the percentage to prices expanding larger home ticket category furniture, of gain this year. that The or break than Part of

For years. as revenue of been a percentage teens context, the to has mid the in category furniture low two past the total over

several again focused Overall, forward control next figure to of expand deeply within detail quarter our than and support you true turn the greater further and the commentary unlocking Nicole outlook. call our to on to strategic that can initiatives. Kirkland's. the we to Strain, provide way. on fourth the And that, for expect executing additional along we Thank on key our XX% the We our our Nicole? over COO, going we're look in potential be of what all to performance I'll years. mix the who'll over With CFO

Nicole Strain

everyone. Thank you, morning, good Woody and

expenses I increased sales, XX% by just excluding e-commerce and In get EPS Jackson, our occupancy of decline depreciation comments negotiated on first with rates; Tennessee, store; fourth average over XX in years, cost reductions XXXX, transformation per consolidated wanted percentage by comparable past hubs; with square freight adjusted reduce XX% of we've the Before underperforming sales, under two XX X.X% EBITDA stores adjusted created highlight ended quarter, shares. of of into XX almost have two more costs or journey with of sales. points an impairment. at our started e-commerce distribution feet operating fixed million centers outstanding how XX% progress. of this add regional or of by Woody's XX adding nimble a or while To loss for we profit come, XX%, million over and XX% expenses of to XX%; we and or successfully $XX.X closed operating on XX% landed the truly repurchased renewed we further growing leaner, In of in XXXX results $X.XX, X.X gross of and our base, to we margin store infrastructure; our far million million our

XX.X% If you remove our XX.X%. been would year-over-year incremental freight cost, EBITDA margin operating would have and been have margin

Additionally, a decade, a to we a longer significant portion away significant transformation still with we strategy. we margins, inventory deep testament at profitability. who mentioned, and within challenges, as to we from decisions organization our discount is four no made stores profitable to close and order our only with negative decided improve our we year shop stores improve over our EBITDA. to which we've Again, Woody the move most wall Even progress made believe impact in customers of freight in a and had any to have the

built rebuild our we changes. believe make brand. the base, We the strategy been now macro that transformation, in and middle of us are to and these which the the continue re-messaging changes infrastructure Making have in we middle our our of has in the allow of to customer of the But difficult. to challenges many our needed so includes financial

the to sequencing time, we've communicated. While time commitment pivot remain executing timing in we strategy adjust we to on may to need and steadfast and overarching on our from

furniture of higher increase down best an see a store during driven receipts, an of We and The to for financial decline a average December a from November, quarter. E-commerce in stronger million both did down to in additional of traffic total store X.X% to and retail two sales in end average to in We XX ago mix $XXX.X of the stores X.X%. benefits. to our stores decline quarter, primarily and store reopened and stores was our were the a will the total had comping online, a year we January quarter. year XX the ideal limited options quarter closed approximately within categories. Now which in relocation XXX include year inventory X.X% unit XX% two basis, January. of across the accounted stimulus fourth a We shift in $XXX.X the sales believe more holiday comparable base. previously remaining count of comp XX comparable decline XXX, quarter, million had from and the closures, sales XX% of store be On a in within stores. decline X.X%. the a that refreshes included to late closed Net result results by decrease approximately the of better still sales compared ticket the our comp the for were and which increase slowing the XXXX Breaking and in quarter with during

XXXX. place the fourth years. We expect XX.X% XX.X% [Landed] compared to Gross XX% these sales compared over the in changes to to of to was margin XX.X% in the of product was two year quarter take five profit next quarter.

compared costs sales having increase result fourth Excluding of shipping in fourth to ship-to-home quarter quarter lower prior to basis XXXX, incremental margin of increased approximately in E-commerce in sales. to the X.X% of basis base improved increased points freight a quarter, due costs, compared XXXX. as X.X% year the the year-over-year XXX of XX of to quarter. the this Store sales occupancy primarily landed a the

negotiations. of Given shifted in are that have rent now to regard profitable, our strategy we stores all our

in reductions the rent vacancies or in locations, in some there meaningful center are markets. get to continue if certain We especially

of receipts the which locations, December compared receipts expedite sales also in the freight to X.X% challenges stores rates of sales. performing the come and XX holiday to were due control prior of late due balancing the larger products from up higher normal and basis periods, by year inventory Outbound impacting past for the labor costs arrivals negotiated to locking holiday in in with more from and decline years. cases, in [DC] slight some in increased the for a with from base to we hiring longer points remainder space are period in DC quarter. rent increases to in than and does order inflation labor in ramp lower we rent However, arriving costs two routes Also higher also handle was late X.X% January.

other expenses. and of offset increase and from the period Lastly, sales decrease increased other the sold million fewer a the points, to we Compared excluding non-operating a Adjusted $XX.X of sales increase of last These in in fourth same XXXX, of the $X the store in depreciation XX insurance operating quarter decrease or $X.X decreases XX.X% XX.X% costs basis sales of $XX.X due uptick expenses $XXX,XXX. advertising XX.X% of of $XX.X A in million expenses or mainly in inventory. corporate decrease in in minor million million XX.X% impairment and was damages or expenses claims. Operating operating favorable were in excluding good and EBITDA, compared impairment slight million stores sales to million $XX.X had to prior or e-commerce to year. operating a expenses of of compared year. $XXX,XXX with

year cash, the per earnings in quarter tax XX% Our normalized excludes and and $X.XX adjustments, share, tax non-cash compared fourth available the credit in to ended earnings other $X.XX compared million period. on per GAAP prior including outstanding which non-operating XX% no was debt in compared these was impairment, facility. prior prior was million the items normalized Adjusted in with share XX $X.XX rate to minor rate to revolving the year. the our XX quarter in We year. $X.XX

in The XXXX mentioned to end This of impact from credit inventory balance cash to sales ship will a of to of QX XXXX cash have of need result which of in to shift which than carried first million will position inventory reduced on revolving was low is products of products half along in the of for of increase continue back half was quarter increase payment XXXX million significant lower our have facility in the in Our million, current a away was the the in XX the an the in X paid the prior inventory, I and carry the result first we past year negative is will forward. end amount timing and large part end the of year the the chose instead largely larger freight expected to due sell. will receipts. seasonally use timing size we short-term The XXXX. inventory half year of that available packed sell due and Inventory XXXX. with with year. and a early year product we the the being inventory holiday just We we first the the relevant as the in due half higher in inventory for XXX to abnormally burden fiscal the our to at also

compared average inventory year levels XX,XXX the January year. per Our store XX% at to or the in-store in prior up ended

X.X $XX.XX with average we XXX,XXX for our shares shares X.X an million repurchased the at million share fiscal of cost for share. $XX.XX at continued cost approximately program million the of for per average fourth in XX.X We repurchased In total an buyback quarter per year, share.

to start year. an In the repurchase we million we shares available million. January, authorization year, a at our at XX we outstanding cumulative had repurchase XX.X XX% year-end, early share authorization the announced of and Within additional

we've industry, a to of macro near-term suspended forward XXXX range. facing terms all the outlook and Now targets. our looking in top and term longer the a With bottom-line providing temporarily uncertainties financial broader fiscal

helpful However, some context. we do want to provide

the trending comp sales comp. today QX sales Our slightly is QX than better top-line

in expect and expect we XXX to And half higher start the top-line XXX weather points, gross XXX margin year in operating some profit driven We first better of the expenses back impact to freight recover year. customer impacting lower in be to the the a the year year, half basis to performance by the increase much year. than XXX expect quarter discretionary are of perspective, declines expected the are points. From we spending will macro clear lower levels. first we of prior the the which half margins February from exceed more will and The basis inventory the But as we traffic. last challenges comp affecting the how visibility costs negative freight with currently by than prior

are we after the will carries fully provide a XXXX cost freight platform, holiday inflation and approximately Assuming operating ability data mentioned store once said rates of understand lean that to back and in-home half ramped level, projects Woody Having in messaging. budget delivery, to upside basis the needed an perspective, continue technology flow XX at in this the organization which group. to to wage From we us to incremental the from labor taken XXX customer year, deeper be segment million which we support did elevated better projects a much the believe relatively of us and start and increases manage that Two that, we year. points, we allow sales believe of expense expect customize reductions. primarily similar the advancing leave we customer consumer benefit an behavior have QX significant those

do operating to we levers if So have to continue expenses decline. sales reduce

targets sales as a EBITDA financial income laid of profit long-term out the for we've achieve operating and previously percentage percent to as timeline a the of that extended gross sales. also margin, We

it original one the full closing remarks, two but our targets we we the to faced out years. that metrics in according right we to executing them the confident our to Echoing of strategic despite this are expect these to two we to Woody's of the transformation. in same pivotal We positive acquisition. customer For and XXXX, as close a anticipated, now all challenges instead next three which remain brand the track the remain and new years next impacts achieve on the point to for our awareness our leaders drive this Kirkland's made year across the is to we is and testament plan of than of going a organization. our much see XXXX be to merchandise to to improvements personnel sooner efforts start

continue now we joining foundation we will ready we excel are in begin that Thank for have Q&A. to us on And believe a to solid transformation efforts. firmly today. areas our We And for can control. you the capitalizing we all

Operator

[Operator comes Anthony Lebiedzinski question from first today Instructions] from The Sidoti.

Anthony Lebiedzinski

far as the QX as better so whether sense about has issues versus March give been I Can so first the some versus So commentary there far. as weather a to February? year. last you was us know far

far wanted dig to details a trending know wanted little as better just QX, for more get that's into more So bit than quarter bit little in the as just what day you're as I it use the a but to here seeing late? of

Nicole Strain

softer much Within comp. February a is the quarter

higher much bit from but So comp a than tougher calm. February, be decline little on we actually a saw a march

in all which things furniture we're as happy as script, not results. are traffic, as now his ticket average So consumer But that March piece furniture happy the happening by really in and been seen and increase that of as the is far Woody event with we've of the that shifted, customers’ from that the those Obviously, the we some have is world acceptance a with. of components. the happy right in been the into have mentioned impacted with

within what there's of year little month happening was last a bit So QX, to month. noise from

Anthony Lebiedzinski

year separate that far you for are as of you percentage is what's including was quarter give about outdoor well, will the that or including And last is speak going your furniture? And could think furniture, outdoor of as you a you that also for furniture expectation what fourth year? as you to us from? as then that are initiative benefit When you and to within be speaking sense sales, furniture, for the

Nicole Strain

Woody and add. start then to may I'll something have

looking is and furniture Historically, But in this that at not about plan last we outdoor So we be we're our where that's going have XXX year. sales, to included for from year category. were of differently. points forward, XX% bit little furniture furniture our the a up basis

that will in the into the we comp future numbers So as outdoor furniture roll category. change

Steve Woodward

are furniture trying competitive accessory our and the with to more sure make driven. We are specialty assortments furniture line driven environment that and more less in

to do growth and for ready situation on ultimately, us had board. quality in to which stock is win comes just that are also -- as in are The in have season really offering. May we We step a outdoor And and should opportunity pretty Luckily, we've evaluate us. our April go, stock we back be we good and of outdoor our a our furniture big category for what then furniture. in

So we're they'll some we Kirkland's, start that indicators -- of set as of been great new the have very very value see that look fresh walking optimistic some specific into and promising. gets the pieces a optimistic at and the really this have as and customers

to So, where back one, inventory we we and into wonderful have to sell like how stores we're any our a about excited evolved how can have the them feel excited. yes, is customer the We're are and have finally invite look and excited, in excuse also place inventory off we and our have assortment experience.

Anthony Lebiedzinski

brand new markets. April mentioned you a awareness test that will you And be also in launching in two then

us then that And how give markets? much as to does spending to that? So you on plan involve, those as how stores spend that first, sense to can on initiative, many you far two a us

Nicole Strain

to and markets It's closer two of also our home. bigger

And we there, not dollars. So incremental at this point, it reason I that's as Nashville we spending Atlanta. starting and looking the think are at are

with your so as because performance shift performance brand some to stand have trying successful, marketing for marketing successful that what our be low. mainly We believe start of people at are you really the acquisition awareness proven hasn't and brand knowing knowing is for. to we efforts And to

takes it's as marketing we So though. the it. to we I it unless overall Overall, pretty results advertising and off would order in expanding getting those are incremental it say, budget at a looking not But year-over-year, just our markets, increase. we are two significant us sales, and quickly love in support enough reallocating

Operator

The with John The next Lawrence from question comes Benchmark.

John Lawrence

appears is of to that and bit, all, be, some that, the stores the the several of a be can all, weeks and Woody, would of years quality some last better talk appears furniture you ago to talk than a little about and of you So some lot correct? that first in outdoor maybe transformation over couple first of

Steve Woodward

found styled, absolutely retailers lower that be that at kind into and be having home quality would big even could correct. the the ourselves you specialty from wanted situation gotten stores. box where And where aligned with That's we the find significant or of a the We move had but we at a improvement point. away interestingly more price to we

we is And this we've was recalibrated and going to of reflection it I we our we're So where that got -- great last mix. we late price kind different supposed of test really the is -- most year, this entire have a product year do of be and are of feel in our points. who

is the feel taking oh, like, and sometimes a were on furniture pricing are now a We our the buy of of the bit cushions to cushion customers top I -- of the approach furniture including this because then price it. our little have different with we the that price, of

some adjustments kind are our to related that tried to make more So furniture of we've shopping.

scale now. with of some yes, is consumers, right than our to fit slightly seems that But whether is But or smaller floors Our hitting in home. living an smaller apartment it in retailers. other they specialty maybe the the

first email think looks. the out proud in I'm really it ad today came the way and of I Our

we're the and really in excited we purchase now chance to it. about We're start the So have give year it. consumer clearly to this

Anthony Lebiedzinski

question more of supply couple availability for on standpoint? some from missing, or to a there that holes a fill me like comment still there still are you're is can some product or would one just still -- -- So is, you

Steve Woodward

gotten great those think something. But because question, new we've always feel like into our finally I our the I looks there's stores. where set to invite into and we're ready Anthony, position consumers store

our the be about strategy the was it store. big into back were set on our feeding would kind it Whereas year, last Part entire consumer. obvious of collections with blends a probably less a of we and So that really completing stepping worried to sets.

good we've that. so on And made I think progress really

So to don't going will the yes, it. think that something, there's see always be I but consumer

our reasonable compared quality, complete when competition. styling at walk upgrades and upgrades to specialty of they'll I think that beautiful our in some prices our with furniture see to

having environment, to months. next the by be macroeconomic our just shine this, think the constraints in several I a so And time as this could

Operator

question Schwarz from Next Matt Investments. MAZE comes with

Matt Schwarz

to you were sure it margins was believe that? gross about to for you being When XXX correctly. want I I make quarter first XXX talking you I heard about, talking was it down, points, basis the were

Nicole Strain

of necessarily products. a that was But year excess freight the products this the should manage know think sell than products that decline. then the the amount. of of being as same ship then we about rate half QX be we lot is the last the and year similar talked really we to first back and what with back So to of that inventory into and few the and go and we at similar into have shipping But if should expedite retained about up half to by ship late to and we And all the when our higher year rates I the and paid was in QX year, down year goes we back it paid of past the then of half, holiday basis upside for flow we try the point last half XXX first and that freight it QX half half what a not better, flow freight the much. the the things year we XXX QX expecting to first we’ll year

Steve Woodward

were like year. we things have a back this and it bring with so that reduced and year because don't of that in freight in the the new to here. our Matt, costs the deep we've this, we at competitive We increases want one felt handle we've time, immediately price warranted, done, discounting, some to that to profitability. happened product with and of of half increase the same worked and take us one, just did discount. this help be was us through go of we've We our some to early get of at strategic proud also last hard and And into I'm put it how

things, impact they're going happen. what's maybe waiting to see have to on two like an those had I So think consumers,

to I maybe they're go over like trained think too. that we've XX customers waiting a of because how us the It’s that's lot world the off, whole years. is doing still for

And where a the so has I deeply think it's a past. discounted yourself change been be have be your as profitable, future more in pattern behavior can setting not we and and it's as our to for also

Matt Schwarz

QX generate above know, I half you QX reason you as And that into margins, merchandise margins those landed you the you that could confident your the because is were this I and actually feel asked get get year your And are very strong. past levels? still back into

Nicole Strain

QX. in Definitely

XXX for benefit that half, be basis XXX will in the the with points in think bulk I back to of QX. the some QX

Matt Schwarz

so have are with things. just sense then I of And things working and closures some versus store comps how

the For sales run, than sales little be? what quarter, more a QX, quarter? would to similar comps let's be down the first if total say, would Total fourth

Nicole Strain

comp. basis points of the XXX Yes, top on about down

Matt Schwarz

basis type representative in think level, a that do at go the pretty And year? then this you fourth you just that's sales the that that of of you quarter do think forward for lastly, experienced deleverage occupancy

Nicole Strain

I do.

about of we not talked are the I a similar be on down deleverage expecting of we we in year. part -- comp full first a think that sales for QX think are in have to QX amount down, what But sense. the makes I if

Operator

our Mr. like to turn any I to closing Woodward concludes back question-and-answer the remarks. conference session. for would over This

Steve Woodward

Thank, to you. everyone you it, like speaking report our first for Betsy. Operator, forward And call. listening appreciate look we when quarter to to results. XXXX we thank we of to all We'd today's really Thank

Operator

presentation. The Thank for today's conference has attending you now concluded.

You now may disconnect.

Kirkland's (KIRK) 17 Mar 222021 Q4 Earnings call transcript