Kirkland’s, Inc. (NASDAQ:KIRK) Q1 2023 Earnings Call Transcript

I want it to be a really natural process for the team to ensure that we’re buying the best product at the best cost from the correct vendor, whether that’s a direct import or an indirect import. So we’re really taking the opportunity now to make sure we’re managing it holistically, but it’s definitely given us across all of our categories a pretty solid footing to ensure that we have unique high-quality items at a great cost.

John Lawrence: Great. Thanks for that. Last one for me, Mike. When you look at the positive comp in April, obviously, was the promotion that hit gross margin to drive that if you x that out with a 4 comp in April, if you just split that month’s out, did you see some of those cost leverage a little bit with a full comp or is it not the right way to look at that?

Mike Madden: Yes. We certainly gave some margins in that event, but it was productive. I mean we drove margin dollars. And with a 6 comp in April, we are able to leverage a lot of most, if not all, of the expense line items that have been deleveraging quite a bit with the negative comp. So you can see it. You can see that in play when you have a month like that, the flow-through is very strong. So if we can create some momentum here in the back half that model is there for us. I mean if we can have a positive comp in that range that’s going to be a good year for us. Just given how much we’ve taken the fixed cost structure down, we’re still able to operate. We still got all that we need. So the flow-through can be strong.

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

Ann Joyce: Thank you, Andrew. We’d like to thank everyone for listening on today’s call, and we look forward to speaking with you when we report our second quarter 2023 results. Thanks again for joining us.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.