kirk20250504

kirk20250504_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended May 3, 2025

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from ______to ______.

Commission file number: 000-49885

Kirkland’s, Inc.

(Exact name of registrant as specified in its charter)

Tennessee	62-1287151
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

5310 Maryland Way
Brentwood, Tennessee	37027
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (615) 872-4800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KIRK	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value – 22,461,383 shares outstanding as of June 12, 2025.

		Page

PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited) as of May 3, 2025, February 1, 2025, and May 4, 2024	3
	Condensed Consolidated Statements of Operations (Unaudited) for the 13-week periods ended May 3, 2025 and May 4, 2024	4
	Condensed Consolidated Statements of Shareholders’ (Deficit) Equity (Unaudited) for the 13-week periods ended May 3, 2025 and May 4, 2024	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the 13-week periods ended May 3, 2025 and May 4, 2024	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 5.	Other Information	27
Item 6.	Exhibits	27

SIGNATURES		28

	*May 3,*			*February 1,*			*May 4,*
	*2025*			*2025*			*2024*
ASSETS
Current assets:
Cash and cash equivalents	$	3,535		$	3,820		$	3,836
Inventories, net		76,415			81,899			75,789
Prepaid expenses and other current assets		5,241			5,585			6,540
Total current assets		85,191			91,304			86,165
Property and equipment:
Equipment		18,832			18,905			19,119
Furniture and fixtures		60,867			61,354			63,516
Leasehold improvements		97,258			97,635			100,447
Computer software and hardware		78,926			78,847			78,561
Projects in progress		290			287			371
Property and equipment, gross		256,173			257,028			262,014
Accumulated depreciation		(235,707	)		(234,966	)		(234,277	)
Property and equipment, net		20,466			22,062			27,737
Operating lease right-of-use assets		116,569			121,229			121,410
Other assets		3,183			7,593			7,271
Total assets	$	225,409		$	242,188		$	242,583
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	39,545		$	43,935		$	39,963
Accrued expenses and other liabilities		20,439			20,183			23,020
Operating lease liabilities		38,532			39,355			38,590
Related party debt		832			—			—
Current debt, net		—			49,199			—
Total current liabilities		99,348			152,672			101,573
Operating lease liabilities		90,820			95,085			94,529
Related party debt, net		9,028			—			—
Long-term debt, net		38,935			10,003			47,541
Other liabilities		3,496			3,445			4,405
Total liabilities		241,627			261,205			248,048
Shareholders’ deficit:
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding at May 3, 2025, February 1, 2025, and May 4, 2024, respectively		—			—			—
Common stock, no par value; 80,000,000; 100,000,000; and 100,000,000 shares authorized at May 3, 2025, February 1, 2025, and May 4, 2024, respectively; 22,454,348; 13,117,942; and 13,038,978, shares issued and outstanding at May 3, 2025, February 1, 2025, and May 4, 2024, respectively		192,166			177,543			176,793
Accumulated deficit		(208,384	)		(196,560	)		(182,258	)
Total shareholders’ deficit		(16,218	)		(19,017	)		(5,465	)
Total liabilities and shareholders’ deficit	$	225,409		$	242,188		$	242,583

	*13-Week Period Ended*
	*May 3,*			*May 4,*
	*2025*			*2024*
Net sales	$	81,504		$	91,753
Cost of sales		61,220			64,685
Gross profit		20,284			27,068
Operating expenses:
Compensation and benefits		17,854			19,286
Other operating expenses		12,266			14,318
Depreciation (exclusive of depreciation included in cost of sales)		660			961
Asset impairment		20			11
Total operating expenses		30,800			34,576
Operating loss		(10,516	)		(7,508	)
Interest expense		1,348			1,127
Other income		(84	)		(116	)
Loss before income taxes		(11,780	)		(8,519	)
Income tax expense		44			311
Net loss	$	(11,824	)	$	(8,830	)
Loss per share:
Basic	$	(0.54	)	$	(0.68	)
Diluted	$	(0.54	)	$	(0.68	)
Weighted average shares outstanding:
Basic		22,093			12,965
Diluted		22,093			12,965

	*Common Stock*						*Accumulated*			*Total Shareholders’*
	*Shares*			*Amount*			*Deficit*			*Deficit*
Balance at February 1, 2025		13,117,942		$	177,543		$	(196,560	)	$	(19,017	)
Restricted stock issued		131,006			—			—			—
Net share settlement of restricted stock units		(39,200	)		(51	)		—			(51	)
Issuance of common stock to Beyond, Inc. for subscription agreement		4,324,324			7,730			—			7,730
Issuance of common stock to Beyond, Inc. to convert term loan and accrued interest		4,610,141			6,705			—			6,705
Issuance of common stock for payment of equity issuance costs		310,135			—			—			—
Stock-based compensation expense		—			239			—			239
Net loss		—			—			(11,824	)		(11,824	)
Balance at May 3, 2025		22,454,348		$	192,166		$	(208,384	)	$	(16,218	)

		*May 3, 2025*				*February 1, 2025*				*May 4, 2024*
Gift card liability, net of estimated breakage (included in accrued expenses and other liabilities)		$	10,002			$	10,673			$	11,092

	13-Week Period Ended
	May 3, 2025		May 4, 2024
Gift card breakage revenue (included in net sales)	$	256	$	328
Gift card redemptions recognized in the current period related to amounts included in the gift card contract liability balance as of the prior period		1,114		1,458

		*May 3, 2025*				*February 1, 2025*
	*Fair Value Hierarchy*	Carrying Value ⁽¹⁾		*Fair Value*		Carrying Value ⁽¹⁾		*Fair Value*
Non-Convertible Term Loan ⁽²⁾	Level 2	$	5,668	$	7,293	$	5,531	$	7,980
Convertible Term Loan ⁽²⁾	Level 2		—		—		6,676		7,003
Collaboration Agreement fees ⁽³⁾	Level 3		4,192		5,159		3,995		5,439

	*May 3, 2025*
Non-Convertible Term Loan	$	8,500
Collaboration Agreement fees		4,192
Total outstanding related party borrowings		12,692
Less: unamortized debt discount and issuance costs		(2,832	)
Total related party debt		9,860
Less: current portion of related party debt		(832	)
Related party debt, net	$	9,028

	May 3, 2025		May 4, 2024
Number of stores		314		329
Square footage		2,552,018		2,667,560
Average square footage per store		8,127		8,108

Exhibit No.		Description of Document
3.1*		Articles of Amendment to the Amended and Restated Charter of Kirkland ’s, Inc. (Exhibit 3.1 to Form 8-K filed on February 5, 2025).
10.1*		Amended and Restated Term Loan Credit Agreement dated as of May 7, 2025, by and between Kirkland’s Stores, Inc., as Lead Borrower, the Borrowers named therein, the Guarantors named therein, Beyond, Inc., as Administrative Agent and Collateral Agent and the Lenders party thereto (Exhibit 10.1 to Form 8-K filed on May 12, 2025).
10.2*		Letter Amendment to Subscription Agreement, dated as of May 7, 2025, by and between Kirkland’s, Inc. and Beyond, Inc. (Exhibit 10.2 to Form 8-K filed on May 12, 2025).
10.3*		Amended and Restated Investor Rights Agreement, dated as of May 7, 2025, by and between Kirkland’s, Inc. and Beyond, Inc. (Exhibit 10.3 to Form 8-K filed on May 12, 2025).
10.4*		Asset Purchase Agreement dated as of May 7, 2025, by and between Kirkland’s, Inc. and Beyond, Inc. (Exhibit 10.4 to Form 8-K filed on May 12, 2025).
10.5*		License Agreement Letter Agreement, dated as of May 7, 2025, by and between Kirkland’s, Inc. and Beyond, Inc. (Exhibit 10.5 to Form 8-K filed on May 12, 2025).
10.6*		Amended and Restated Collaboration Agreement, dated as of May 7, 2025, by and between Kirkland’s, Inc. and Beyond, Inc. (Exhibit 10.6 to Form 8-K filed on May 12, 2025).

	13-Week Period Ended
	May 3, 2025		May 4, 2024
Existing stores	$	478	$	544
Technology and omni-channel projects		86		118
New and relocated stores		4		102
Corporate		—		6
Distribution center and supply chain enhancements		—		—
Total capital expenditures	$	568	$	770

SEC Form 10-Q filed by Kirkland's Inc. COMMONSTOCK