Earnings call transcript Q2 2023

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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 Second Quarter ended July 29th, 2023.

Joining us today are Kirkland's Home Interim CEO, Ann Joyce; President and COO, Amy Sullivan; EVP and CFO, Mike Madden; and the company's External Director of Investor Relations, Cody Cree.

Following their remarks, we'll open the call for your questions. Please note, today's conference is being recorded.

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 Rocco. 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 uncertainties, actual unknown forecasted results cause Those Securities are in filings differ Forward-looking and statements involve the results. to which and Exchange from in materially uncertainties may Commission. with and risks more Kirkland's fully

also to through website the link be available I'd everyone release call this provided for in remind today's September will well company's A replay XXXX. the press as on be will available like XXth, as at via that replay kirklands.com. webcast

Ann Interim over Now, to over to I'd Kirkland's the call like Joyce. Ann, to CEO, turn you.

Ann Joyce

good you, morning Thank everyone. and Cody

into Before to return to work Kirkland's in putting the For start are our business associates we to tireless gratitude my results, our profitability. the jump expressing at by want I

these macroeconomic we knew shift but against and up we am efforts difficult the company to return immediate and to the were remain into We translate confident right all are success the doing I things headwinds, going write profitability. to

remains macro spend their inflation and sales to to prior due portion level, of comparison challenge year customers was challenging activity. on As disposable with QX liquidation On quarter necessities large expected, a difficult a as experiences. a inventory income continue a our

share to competitive. the impact that become began behavior as the of our for wallet levels traffic more has in continued pandemic even battle shift consumer This after

throughout the and difficult were a the X.X%. down year-over-year traffic comparisons As QX comparable result sales quarter, in decline of

which brand focal delivered been and emphasized our décor, call a strong point last relevant seasonally brand. And our increase. we has our home refocused result, historically to a our our our on efforts comp part category as toward discussed Accessories we value as a voice better engage of customers, As and for Decorative

growth continued quarters in the come. expect We category in this to

highly a half. promo that early typically trend led into for and Additionally, drove strong the we is season channels, Christmas higher increased performance both in indicator us décor, that Christmas in which these continued and year-over-year back had a rate demand a The to conversion has QX. categories in July successful

more customer During our the our getting We from to promising saw quarter, we were voice, than to promotional leverage able our strategy. were And we pivots indicators our value in back marketing better brand our planned, routes. we offers. target the while platform shifted data

driver along gross key product emphasize approach, with our the the décor supply by seasonally and enabled XXX us by margin basis profit relevant basis then to points, to shifts, improving margin expand This normalizing merchandise our initial value overall XXX chain in points.

summer next team these planning holiday opportunities floral, win with expanded to experienced target the in the merchandise to who implemented reintroduction is back-to-campus. a are customers outdoor campaigns shifts, initiatives response quick and Through our lapsed also these with back We success capitalize customers the to and already the we initial our were reengage. we of from to and marketing on expand encouraged additional products,

during more quarter. changes, has assortment drive believe along and to revitalized traffic potential weakest We consistent our these product historically a marketing demand strategy, the with stronger

last of our operations, year-over-year. reduced less how proud to have well to the overhang, XX% resulting year, balance lower organization inventory. end of I'm QX the With on in successfully we sheet compared focus borrowings the Shifting inventory managed

and time inventory on the holiday. have hand and has network for harvest flow inventory appropriate Our improved for of in we and levels

to operating expenses the operations were prior able million Cost period. compared to year quarter, second our over the in containment our and we for reduce remains $X critical by

We continue every improve aim expenses for out going door tightly and the the of to profitability we to increase dollar manage the future. efficiency as

the anticipated we extensive near-term profitability quarter as We this and dive strategies and to deep growth. challenge. transition a be return performed Overall, identified a knew we would an time would of to be

but and Some the still of our is up generally initial from remains home pressure rates. mounting under headwinds. changes credit interest inflation, The were difficult soft we card promising, are sector and against consumer persistent debt, higher

are control are working control. of the significantly our of to business we However, the and outside combat that issues areas within improve diligently our

last reposition to with we team be be to organization have of strategically months, the done work three flatter ability a to great a We've for the our nimble. Over ourselves restructured deal success.

associate to social listening, are surveys, that closely the and We connections direct, of voice directly listening and the the are voice customer more. the through of

our we We've what marketing conducted brand including aspects Kirkland experts and behavior, drive our and operational of worked numerous of positioning, our at candidly analyzed our previously and overall off the believe dusted with effectiveness. work help some modernized also tactics, assessment business, to customer worked. We frankly, industry

initiatives. to ongoing, process this still expectations we have that executing address remain issues the have deliver While and we upon these already discovered I begun confident have Overall, ourselves. near-term teams our in many our to is set team's for ability

committed are driven return to profitability. the to We company and

to health a diagnostics over Now, the as results our provide and well turn near-term as strategies. would who detailed checks I President to on Sullivan, more the improvement and our will Amy commentary our of call COO,

Amy Sullivan

Thank and everyone. focused quarter faced but the challenging you, is remain long-term QX, doubt success Ann we we overall vision future our a There the in morning and for of on our good that no brand.

of thorough into check necessary step a business, the growth. a performing been do of discussed, health profitable in a returning to the Ann dive As we areas deep many to organization have

we retailer, latest At great value. which view trends our product and distinct our provide includes a a means point specialty décor with has and are the home need constantly that assortment value-based to we at core, styles a customers of a

and that right the an while where and wants experience Most to importantly, she communicating delivering to shop. when we're sure customers, value omnichannel need to expectations her make style our meets

we in we strategy, our to our advantages and customers needed choose core marketplace. Home reaffirm why the Kirkland's As we the competitive recalibrate have

resonated length, it. from strayed with loyal at we've historically base what and we've because discussed customer we've As of suffered our

Our back entire to an on the ensure are of customers job to all times. finger we getting has pulse basics at the done our team our of keeping excellent

As in discussed in the it last we call, our recent to our and priority core years with disappointed top her. customer is reconnect

through customers at the we in We spent customer to time social make. the online, with every ensure stores, associates have and voice surveys decision channels, of our is media the of across quantitative core and

the home are her core holidays. seasonally joy product her at types finds customer entertaining her is and to favorite core core her and Our decorating relevant and Celebration especially family, around textiles.

especially shopping value. style are right mind based her decisions promotions makes in now day-to-day life. her and by as top is motivated factors macroeconomic She of and on coupons, She

with for before I level back, and and must we've inserted new am our to leadership retain, and this a be building we approach we know omnichannel traffic than achieve is undergoing the overhaul attract some engaged changes. of our drive drive proud and win ever marketing of that customer to more are in complete strategy within new we and her are this our engagement, a basic committed customer. say to To strategies We targeted help customers. back department more get to those

for being health weren't result that specialty effectively we overused broad and of discovered were check, media As tactics marketing dollars and a location, allocated marketing size, retailer based a customer the of base. our

dollars ecommerce top now our better the will marketing believe localization We also targeting more are is priority. within and within The a a align served use so Home this that are We marketing customers shoppers our efficiently by our the XX demand. vast traffic to of Kirkland's of to our areas miles geographic store majority within storefront, campaigns footprint. drive

customer the we engage of the from on that return an to experience internal of and believe support, forward we pulled this in-store external this to customers remainder We for storefront, throughout marketing impacted store. Kirkland's Home Speaking and and and conversion going strategy the the to the brick-and-mortar signage. year traditional lot plan such increased also as parking had our

that sure clearly great looks curated promotions her the are our and to customer We to value intend throughout shopping experience. make communicated

to tactic mail We seasonal direct in launches, new promotional Direct sets, to throughout the with coincide formerly key our used product six holiday to customer year and four a mail a events key year. send was pieces communication strategy.

loyal We key a marketing brought of lapsed this customers. mail strategy both on back our and be Based is the go audience strategy. result, direct in QX a with to limited planned driver now forward in

our holiday season. Kirkland's Back Fall home for campaign In with we'll campaign, launch the Love have in one we week this fact, another with hitting and

through customers leverage most program will announcing We loyalty our target offers direct data exclusive customer product platform limited-time to and valuable launches mail. and delivering our coupon

excited by customer. to renewed commitment the I our am

lapsed be frequency. drive built will traffic, new strategy their to customers omnichannel to purchase increase engage Our and the full marketing reach funnel with with customers, goal

within location. experience seasonal and of miles We passion plan will a online on to leverage each customer's enhancements storytelling media creative content geo-targeted shopping advertising active to inspire to have omnichannel curated by strong customers decorating fifteen clear We presence and and store social improve messaging. through We in-store for will entertaining. the value her believe reach sharing

least, K not we certainly program. Club planning to our enhance are but Last, Loyalty

our experience to have committed We from us. and she the still and confirmed loyal are expects product, by custom value, beloved we are delivering we

more to her solidify Maximizing initiative this about customer our years in coming will loyalty sharing help program benefits come. months. look to for We to our our forward commitment the for

our epicenter, strategic and a to approach With we of other customer back-to-basics recalibrating the areas business are priorities same with diagnostic committed took in our mentality. the

learnings share to of from check. health like the some our I'd omnichannel

omnichannel in strategy starts unique, with We stores. for as both the future. are foundation strategy, and our online digital-first a optimized embracing a product brick-and-mortar This

furniture in growth in large scale brick-and-mortar. Our and décor seasonal our categories cannibalize higher-priced

driver key for furniture However, a and is sales profitability of ecommerce.

be pricing be to our redefine furniture will part but business, value are we true our heritage. to has and believe ensure to continue we We of we important an rebalancing been, will strategy, assortment the our strategy

renewed tools for have our and structure, our to our optimized each focus, uniquely channel. strategy is our and We category ensure flow product product organizational

the to and category pricing done home value this merchants incredibly our adjust I'm work strategy of to have our time in décor. commitment proud renew our to short mix

said promising QX Decorative demand Accessories in Ann As we earlier, in saw holiday. and

be particular, later Halloween, in we holiday year. a good believe indicator currently products strong which will for is this driving demand

curated experience, unique, customers in cohesive online We evolving our allowing both and have are stores. committed product a assortment to our but strategy, to

merchandising a our solidify we up ecommerce our channel full we are of strategy, end-to-end As assessment platform. wrapping

short platform of roadmaps meets that expectations we modern ensure to have assessing the are a long-term today's shoppers. We and

about the as tactics. correlated strategy, product and We pivots we've conversion well to in meantime, directly more improvements and marketing renewed seen as in happy roadmap to traffic look sharing ecommerce the in the brand to I'm overall forward future, but our report our long-term that our

combination right These the Most marketing seasonally further recently, through to future of we long-term drove since highest clarity drive online conversion growth. focus wins to demand. support channel product tactics of the our provide ecommerce the and XXXX relevant strategy to

committed efficiencies experience I'd to to heart to improve in-store moment for incredible and the that talk dedicating stores. are am customers These customer about I've associates. our store experience. store with ensuring a they the their the teams had are optimize we community simplify take week the the calls to visits in-store their both to teams. operational and and each committed to pleasure time our for like and brand and creating the of I of our

our with delivery. resetting standards we leaders, In chain flow and for partnership product are new supply

and every constantly stores step operational the to are and review striving impact and traveling on for ensure its teams our we to to Our discipline are distribution to of customer excellence. their center associates work

IT seamless growth foundation future a our omnichannel we is POS excellent strive as have our system QX, an which team upgraded successfully for Our experience. in to

our and operational to incentives customer. and season store, dedication team our to to In rewarded their for our keep to holiday contests by improving rebalancing and engaged addition excited and introducing incredible for efficiencies are this and support passion payroll we brand the store our new associates

voice to of strategic our we that teams brand. to growth. As before the profitability committed aligned more One, our drive near-term five the our of our path customer keeping a initiatives center at are are and around brand, the than ever

resetting process voice tactics the retain brand of reactivate, acquire, our marketing in to and her. are We and

we home relevant Two, a we to committed new to delivering being ensure great quarters. are drive all to and seasonally demand price. known always We something four curated at product-obsessed, be on for décor plan trend

a and an omnichannel stores shop. plan and unique her meets will she ecommerce. wherever deliver drive wants we to profitable whenever strategy growth, to Three, to that This path to

for foundation through is our Four, shareholders. and we the to enablement, disciplined in committed for and operational containment. This are performance, efficiency remaining and our cost supply profitability effectiveness sustained value tech chain

And the at and built of are our a center. five, high we are driving voice to with performance the success associates have also continuity for

a company am and We in part a of. have I day-by-day culture to are revitalizing seen I energy this be our that proud organization new

few I'd the not Before our diagnosing financial likely be yet It of be to won't who my call and progress the value months reiterate It is results to in turn and ago, continue I the associates, over vendors, to shareholders. we a delivering we gratitude and like of apparent this tangible every business. our we'll long-term since but making journey. to remain support just challenging our near-term, but we committed started function in easy Mike, stakeholders to to transition all our in evolving

to in financial turn to over second the over With will to Mike, call performance I'd our detailed that, Mike you. quarter. who provide on commentary the like

Mike Madden

and Amy good everybody. to you, Thank morning

sales quarter, average $XX.X sales which X% decline million, second were X.X%. decline a the that's $XXX.X of prior comparable compared count and quarter, to in the the net year in included For a million store

The was of traffic sales transaction. was for decrease in-store comprised in down channels, average online, decreases and per and conversion transaction small largely by the in an in average unit partially retail X% increase driven The value declines, rates. offset both both items by

XX% year-over-year down Breaking on July. comps in total quarter. comps down in ecommerce down ecommerce. were sales versus XX% in in with X% down within quarter XX% X% ecommerce of sales prior compared outperformed and June, for XX% the to the during the down was XX% year Stores a quarter, basis May,

period merchandise first a to was shift a receipts outdoor in that compared the selling category second This prior our had XXXX. largest the year. primarily the in year due to decline to from perspective, From later the quarter prior in the caused the

partially compared These ticket with gains declines and furniture year. in We declines wall by the prior largest in having offset Decorative categories Accessories. declines also saw the and higher holiday to were

Florida slightly Sales results performance results West. better was Southeastern in and the in relatively consistent Texas in across geographic the regions and with weaker

Gross versus to year the margin. drove year product increased are the XXX in XX% year-over-year merchandise inventory of profit to to levels, this as basis merchandise XX.X% follows; quarter. along with margin in first, of points XX.X% points and prior Lower in increased quarter. components basis increase lower flow, XXX XX.X% compared sales The key change freight rates margin prior improved the

percentage to costs is costs year. from storage The increased sales and deleverage distribution sales largely On a improved costs. X.X%. with due lower $X.X quarter, the inventory XXX central prior Second, costs combined distribution labor basis, basis efficiency reflecting the to this points a decline million lower increase as lower of were than last year capitalized year cash versus

decline. the deleverage a XXX was as Third, sales to points primarily store basis slightly costs the from percentage increased sales of year The quarter. occupancy increase due to XX.X%. Actual is versus rent up prior

due activity to resulting from store both primarily is inventory X%. freight to improvement and basis in costs, ecommerce reduction levels. including improved lower outbound expenses points Fourth, by The XX shipping shipping

year. routes ran stores the than to a result, prior in the we As fewer

And lastly, by of decreased XX in points to included sales X.X%. depreciation basis cost

XX.X% excluding million to Total sales expenses compared million the XX.X% $XX.X by in sales charges operating $XX.X of impairment prior million declined year $X.X or quarter. to of or

The along decrease and ecommerce tight result the reductions expenses control with expense corporate expenses. primarily overhead and in was of store of marketing

the assets prior million technology impairment, minor to were negative year quarter. other underperforming versus the improved year EBITDA, $XXX,XXX Adjusted $X Impairment quarter stores stock and million charges prior to for compared in to $XX.X compensation, related the excluding negative for $XX.X expenses, and million quarter.

in year to quarter. $XX.X versus Our $XX.X improved prior operating the million million loss

of was the period. XX.X% year tax in income compared to rate of X.X% an prior an expense expense Our

according inventory period. balance million plan. end We versus end are Moving at $XX.X $XXX.X under ended to XX the and inventory flowing control in sheet, our levels the with prior year and million at the to quarter last the year of $XX.X the million of or --

million year compared $XX outstanding $XX the borrowings in had million We at quarter. to prior

largely our distributed inventory in the in has distribution to and holiday arrived process of centers stores. Our being is

our for the of the to outlook year. remainder Moving

providing our impact given difficulty guidance policy not specific on continuing its of conversion visibility environment and the the and We our forecasting and macroeconomic traffic around trends. are

do to around and headwind quarter, the customers the environment third provide purchases. want significant Early for a on Traffic color challenging. our into key some However, expectations be we continues back areas. are scaling remains ticket higher to

faced proving to clearance We due more early difficult year, anticipated. that prior challenging the comparisons than QX in inventory are to excess in be

we side, with that seeing with strong our improvement customer. traction gaining which in in merchandise plus our the channels, on us the optimism However, conversion adjustments are rate some provides are both

to sales the inventory in and on our take side expect QX well-positioned clear stabilize that hold. holiday toward and merchandise adjustments a and positive improve QX as are merchandise the of with to marketing comparisons We end less to assortment begin the is The margin for period.

as improvement expect margin We the to season. merchandise half, continue back we deeper into holiday in the get particularly

help with back which Our margins half. efficiency improve continues gross to the supply lower inventory levels, should normalize profit also in chain

We continue less. such somewhat strategically we moderate focus fund we more as to to of decline year-over-year heavy tightly reductions back year, prior expenses manage expense operating store level as with on well begin as areas from expenses will doing as for as in the payroll the The half and anniversary marketing. operating very

the Achieving profitability year overall our EBITDA, adjusted momentum for fourth sales that will going has trends, for the the goal we with the full been adjusted to start generating our for a coming stronger return XXXX. the quarter. for of terms more In bulk while be in the positive XXXX, goal to half back into expect now that and given second EBITDA the to positive be difficult quarter but improvement results current of

the levels million between balance to expect deeper an and component the year $XX provide sales us inventory be reintroduction and over inventory a our to would reach and million peak a borrowings towards and million of our of seasonal quarter. improvement with composition comes of drive ammunition with $XXX we $XXX the product to end it gains. around should peak third This more prior sheet, When the giftable

get XXXX, improvements our topline. has this, single-digit starts beyond high the adjusted historical which Looking To to average. EBITDA our been mid to with it back in do goal is margins, to

some particularly Amy fruit, time but restore to These grow and create environment, lows. customer building historic off talked the a will activities are about momentum. the challenging base bear and sales to consumer we take underway efforts in

store average Prior around $X.X store $X is average current pandemic, volume million. Our the was around doing to our million.

up Taking on our revenue, lost would over base EBITDA ground which $XX only of store half additional that to over would current $XX translate adjusted million million in yield potential. in

improvements topline additional ecommerce provide potential.

We have and capabilities, costs facilities. supply to fixed from distribution our sourcing improved already enhance remove steps taken chain efficiencies,

of we in to early process, our are still While these because cost structure and improvements see supply the efforts. merchandise our margin beginning chain in

additional areas historical but pathway are over our achieved to We redeploy. reductions of addressing the adjusted on returning address to last will several EBITDA these been factors additional of Significant to streamline each progress quarters, In updates ways areas. cost and we coming to in there have believe these The the the provide provide we are our operating structure. combination years, levels.

our capital reiterate to priorities like I'd allocation. Lastly, for

liquidity reducing level on the operate reestablishing first business focus with us to of more to that continue flexibility. allows borrowings We that and

as repurchases strict and dividends there, to From business can looking efforts will return ways value is at on with As additional shareholders. share the reinvesting our return that in we achieved, milestone parameters. to focus we start

for create that On the and to stakeholders gratitude express the that support partners, and way long-term to value for shareholders. collective Kirkland's our efforts brand. employees, my success our note, pave confident Home I'd our I'm for and for our commitment will your like

Operator, prepared we're That ready now Q&A. for concludes some remarks. our

Operator

Instructions] you, Thank [Operator sir.

Hamblin Craig-Hallum And from go Capital ahead. today's first Jeremy question comes Group. Please with

Jeremy Hamblin

what the sounded Thanks to that terms we were because -- August. you for seasonal trends caution a taking sensed if could question. of saw goods, mixed I on see trends, a same-store you bit some the it little response the get in wanted little color here sales in to on but here early encouraged by more commentary

be might store able provide was maybe detail So, to what I was hoping same a on the more combined for August? little sales you

wanted easing the you noted bit if easier could see also you from compares of us the what do is? then And a that gauge magnitude little here, to compares for get

Mike Madden

the along trends continue and Sure. start phase lines the the I'll can the in Mike, said time QX. in are really be But liquidation, Amy in quarter, think in that of mind of of it this And fill prepared But far we in tough, inventory they we the was so the remarks. against I in initial kicking as up year. it performed this Jeremy, is to third really to deep part keeping would how last in. August I as about

we Day a Labor And really year even so last lot weekend, strong a liquidation with over the had efforts. of one

of we're to going coming timeframe do compares for where be bit. that ease rest So, the quarter of out the up a

and kind strong was us -- going had but weak. was relatively deeper year, We into very year, a November then month last the December of for

in opportunity we've assortment that a just more to and the see compete. support got timeframe, we so really we've year got a will better assortment, that we and really product have December in didn't that timeframe last giftable And coming as

And-- for the rest of the play So, that's compares how year. kind out the of

Amy Sullivan

-- thing would our to be only I you that the would pivot to add we're as category Jeremy, making mix. know

able impact is QX QX on the we were results of have and the relatively part even so small. first And to

more like fruitful the become the in were So, make optimism back we into able Accessories in half key category and the move holiday of in categories those pivots later penetration that we categories larger as year. to seeing because the Decorative we're

Jeremy Hamblin

margin. to, like, to you the had Got those it. EBITDA to single-digit sales Thanks. terms rate, you mid-single-digit goal from to that million per of noted you a back $X.X you that store million $X And that net in run then get in returned if high -- thought and

sure massive challenge target of something of, XXXX a more or In Is magnitude? really acceleration to XXXX? terms to type make that of still just you're in unless XXXX that thinking realistically, seems Just in it that weren't like, you be wanted like a comps. XXXX a for turn that see like expectations going that's

Mike Madden

and Yes. all where think can the I'll stand and get we the in say activities that fold talked level we going be that trying on back here the to at in the we we'd -- call knowing what's Jeremy, environment for and sit I just our in XXXX about customers don't on here.

But in see that think a market to EBITDA of position get year's we have as marketing I and we're in can improvement do XXXX can we changes the positive changes the that full assortment XXXX relative effect a so to we talking back XXXX. about

a position quickly, just I strong so -- will our single, How but we that build ready say XXXX. to to get progression to the is there. on of there depend confident we're get we just going on high don't mid that happen we that's this are next beyond year, topline to and to as think back But can

Jeremy Hamblin

is, about where environment then and to thinking And expectations earlier out borrowing of interest terms up, dates. kind year guys made the just shore rate maturity your extend it. costs Got you this of or in booths

either How interest a rates here of, should basis, about, quarterly kind kind annualized basis those of are on with be an we costs -- where thinking or a currently?

Mike Madden

the back half today. to I'm that's where the where This We -- few a half like interest are think, just year, rates million. year knowing for and $XXX,XXX, up on looking of last are would going probably had million $X.X at last we I a of maybe back the Yes, about year. be top $X.X

our going control peak are year very out borrowings our think in than year. good to levels do are inventory last I relative to because lower last

will here higher. more but to are your year this little rates need in year for expense a less season, a back last the is bit year. the little borrowing as the built versus So, And in bit that the point, this up half we've us be

Jeremy Hamblin

your pivot terms then it. in back noting back one, expense direct that mailers, about think six and some that then used to the bringing in we that have of and Got operating the terms the to here last you How to half four do of degree. on of marketing year? budget in And

it's like year. year-over-year, maybe down sounded can last you modestly only on share still think be It you to color going Any versus that? but

Amy Sullivan

Jeremy. making expense our is marketing pivots down $X year-over-year that. the take these we're in And budget, Sure, current self-funding marketing that and we million I'll within that marketing are strategy. roughly

that able mentioned for just efficiently of more this the we're core to strategically balance budget they'll relatively used well. before, to a flat year in And ways and for dollars them the built we've self-fund year. we using past, those I the our as into customer plan next in targeting As and be as

Mike Madden

Yes. take We're or may, up. couple year. million move on think I but of give that that's a marketing may the little aiming this next for $XX months, of a We about kind we around number bit, depending over where happen, what see number we'll end

So, that'll be down year-over-year.

Jeremy Hamblin

with the year. the Got it. Thanks good rest for all and luck of the color

Mike Madden

Jeremy. Thanks

Amy Sullivan

Thanks Jeremy.

Operator

John Benchmark. from Our ahead. Please next today of Instructions] go comes Lawrence question [Operator

John Lawrence

morning those as holiday quarter the guys. you far of impacted were of for give couple some harvest? just a talk about small Good that categories a you Could me that in thoughts in as you -- Mike, color. Thanks what's Yes. all third that with and pleased been as

just what move what get as X, get you've we as so peak delta move what's the seen holiday? we to period. extent the If as And the up it's mix forward, into we holiday does far? into maximum To it

Amy Sullivan

any can start add Amy. color. Hi, Mike John. It's and I'll

we back into assortment holiday. year, our Christmas half most move within in the plan the did As our significant growth comp we of

Decorative the Accessories parts business. giftable of from Other the growth come really and would

pivot obviously earlier, sort making mentioned the live we of quarter. as So, we're throughout

would opportunity I healthy to a it gifts. of growth December back the a about getting percent total. really maximize being that and of this to say The But is décor the Christmas bigger on X% year-over-year comp really component to

allows within assortment and the at furniture business, opportunity still to brick-and-mortar getting our as I holiday of so it shine. space into our back and it the the important part time, teams that businesses While an mentioned, for being same giftable really

Mike Madden

And It we for to seasonal, that categories go think, of job [Indiscernible] the a of these that those in going season good we've some the in of noticeable did in well. key a as terms of items it's shift QX. deeper the talked Yes. trying to be penetration I really a, about the

that's So, just last place we in didn't year. something have

are we optimistic that. about So,

John Lawrence

of follow any there you've guidepost sort to can far it you give of positive kind I returns they what that of measure you're how -- of were quantify, were what and to -- category, that they any looking really that, to they And touched are areas that particular of success? extent to positive as some on as those sort were some guess area of

Amy Sullivan

Yes.

at beginning period specifically comp increase and double-digit of Accessories the at QX, the look year-over-year. QX you Decorative a even sales If delivered early

that continue so grow to category, to balance penetration particular, will get of year. the the we its as And in in

would lot then the And optimism we gives the fast a saw is turn share early indicator for season our in other success general and I really holiday of in me products in that Halloween.

seasonal are in ended But And sold rate we our Halloween high particular low a and and the solid season. with effectively really at each know, product businesses minimal of promote a still them discount. as you the margin end at

that as quarter season of we strategy this took mix we gives a optimism me just to we holiday same the see half some assortment and in through the that early that should our of pricing latter selling the come approach get And lot the of products. to in Christmas

John Lawrence

me. question Last for Yes.

that changing or -- to that you right, those I -- mail spin bounce do long that, how sort bring As some so you time view you What of those of -- and shoppers. of things your sort how some that, sort back those efforts did was trying at -- did some of customers Amy, but of and marketing to all pieces as you know that? you're of looked to direct view back,

Amy Sullivan

approach call really we with reaction customer a survey layers engage different six to missing and was started we levels to several to Our feedback and us. that really of that our was what so willing and lapsed, was of from fast she on that months us give high customer XX was

to response and it rate that past, would really a sent a Additionally, coupon our the to a with mail direct top and QX average conversion normally lapsed our both, in piece, customers. solely offer. top targeted than We customers higher on which to mix promising saw of we have

a these share back our would routes then the and seasonally she high-value I acknowledging that solid that her with coupon and expect customers can customer as example relevant, for And heritage that. we are we would and letter, be we a last most décor us years to sent And to really saw our that a were come lapsed from well. offer to offered response

So, base. have that loyalty think we active is us a I leaves very where

encouraged by the willingness at lapsed like, to others come as longer her assortment are who pricing the we're have been spending Some strategy rates normal get than her really who currently and we back we and than right.

John Lawrence

Good Great. Thanks. luck.

Amy Sullivan

Thank you.

Mike Madden

you, John. Thank

Operator

Thank you. Ann the to question-and-answer like concludes back At to this call turn closing over now our session. time, would I this for remarks.

Ann Joyce

hard our of Thank the teams, our I you to reiterate stakeholders. for talk well support as vendors, our you gratitude as for want work Again, joining next teams, just quarter. our today. all the from to and our We'll

Operator

today's concludes conference This ma'am. call. you, Thank

lines your your participation. you disconnect for this at now time and You may thank

Kirkland's (KIRK) 6 Sep 232023 Q2 Earnings call transcript