Kirkland's Earnings Preview

While Kirkland's (Nasdaq: KIRK  ) missed estimates last quarter, investors hope that it will bounce back and outpace Wall Street expectations this quarter. The company will unveil its latest earnings on Friday. Kirkland is a retailer of home decor in the United States with stores that present a selection of merchandise, including framed art, mirrors, wall decor, candles, lamps, decorative accessories, and garden accessories.

What analysts say:

• Buy, sell, or hold?: Half of analysts think investors should stand pat on Kirkland's while the remaining half rate the stock as a buy half of analysts think investors should stand pat on Kirkland's. Analysts don't like Kirkland's as much as competitor Pier 1 Imports overall. Seven out of eight analysts rate Pier 1 Imports a buy compared to two of four for Kirkland's. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
• Revenue forecasts: On average, analysts predict $94.1 million in revenue this quarter. That would represent a rise of 1.5% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.04 per share. Estimates range from $0.04 to $0.05.

What our community says:
CAPS All-Stars are solidly behind the stock with 86.8% awarding it an outperform rating. The community at large concurs with the All-Stars with 83.2% granting it a rating of outperform. Fools are keen on Kirkland's, though the message boards have been quiet lately with only 64 posts in the past 30 days. Despite the majority sentiment in favor of Kirkland's, the stock has a middling CAPS rating of three out of five stars.

Management:
The company's revenue has now risen for two straight quarters. The company's gross margin shrank by 4.5 percentage points in the last quarter. Revenue rose 0.2% while cost of sales rose 7.6% to $58.9 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

One final thing: If you want to keep tabs on Kirkland's movements, and for more analysis on the company, make sure you add it to your watchlist.

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Earnings estimates provided by Zacks