Zacks Investment Research downgraded shares of Kirklands Inc (KIRK) from OUTPERFORM to NEUTRAL on April 26, 2013, with a target price of $13.00.
We are downgrading our recommendation on Kirkland's to Neutral from Outperform following soft results in fiscal 2012, and declining comparative store sales for several past quarters. Low consumer demand and seasonal factors have been pushing down same store sales in the company. Currency headwind and macroeconomic challenges are adding to the woes of the company. The company is finding it difficult to maintain business momentum and is combating with high operating costs in the form of rising inbound freight and store occupancy cost which are crippling margins. However, the new revamped merchandising mix of the company aided with aggressive marketing team is expected to help it to turn around in the near future. We therefore prefer to remain on the sidelines with a target price of $13.00.
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