Kirklands vs Pier One
Financial Statement Analysis
Kirkland’s
And
Pier 1 Imports
I. EXECUTIVE SUMMARY
Kirkland’s Inc. and Pier 1 Imports are among the major players represented in the retail home décor industry, where there is a constant demand to provide the right merchandising mix and marketing program for consumer attraction. However, in recent years there has been a decline in the retail home décor industry. Consumers have cut spending in anticipation of the continuing rise in gas prices, unemployment rates, interest rates, consumer debt and taxation. In the midst of a sluggish, unstable economy, both companies struggle to be profitable. In addition, the increased consumer spending in the fourth quarter for both companies does not sustain their revenues annually. Unfortunately, the success of both companies is dependent upon factors that are uncontrollable. Both companies can gain profitability if drastic improvement occurs in the current economy. The following is a financial analysis of both companies that will assist in determining which company would be worthy of purchase.
II. TABLE OF CONTENTS
I. EXECUTIVE SUMMARY 2
III. DESCRIPTION OF THE COMPANIES 4
IV. DESCRIPTION OF THE INDUSTRY 6
V. ANALYSIS OF INCOME 7
VI. ANAYLYSIS OF BALANCE SHEET 10
VII. ANALYSIS OF STATEMENT OF CASH FLOWS 13
VIII. ANALYSIS OF THE STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY 16
IX. ANALYSIS OF THE NOTES TO THE FINANCIAL STATEMENTS 17
X. OVERVIEW OF QUARTERLY DATA 22
XI. REPORT OF INDEPENDENT AUDITORS 23
XII. MANAGEMENT’S REPORT AND ANALYSIS 24
XIII. ADDITIONAL RATIO ANALYSIS 25
XIV. DECISION BASED ON FINDINGS……………………………………….26
III. DESCRIPTION OF THE COMPANIES
KIRKLAND’s ®
Headquarters
805 North Parkway
Jackson, TN 38305
731-668-2444 Headquarters
100 Pier 1 Place
Fort Worth, TX 76102
(817) 252-8000 www.kirklands.com www.pier1.com
Fiscal Year End
Saturday closest to January 31st
Kirkland’s
And
Pier 1 Imports
I. EXECUTIVE SUMMARY
Kirkland’s Inc. and Pier 1 Imports are among the major players represented in the retail home décor industry, where there is a constant demand to provide the right merchandising mix and marketing program for consumer attraction. However, in recent years there has been a decline in the retail home décor industry. Consumers have cut spending in anticipation of the continuing rise in gas prices, unemployment rates, interest rates, consumer debt and taxation. In the midst of a sluggish, unstable economy, both companies struggle to be profitable. In addition, the increased consumer spending in the fourth quarter for both companies does not sustain their revenues annually. Unfortunately, the success of both companies is dependent upon factors that are uncontrollable. Both companies can gain profitability if drastic improvement occurs in the current economy. The following is a financial analysis of both companies that will assist in determining which company would be worthy of purchase.
II. TABLE OF CONTENTS
I. EXECUTIVE SUMMARY 2
III. DESCRIPTION OF THE COMPANIES 4
IV. DESCRIPTION OF THE INDUSTRY 6
V. ANALYSIS OF INCOME 7
VI. ANAYLYSIS OF BALANCE SHEET 10
VII. ANALYSIS OF STATEMENT OF CASH FLOWS 13
VIII. ANALYSIS OF THE STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY 16
IX. ANALYSIS OF THE NOTES TO THE FINANCIAL STATEMENTS 17
X. OVERVIEW OF QUARTERLY DATA 22
XI. REPORT OF INDEPENDENT AUDITORS 23
XII. MANAGEMENT’S REPORT AND ANALYSIS 24
XIII. ADDITIONAL RATIO ANALYSIS 25
XIV. DECISION BASED ON FINDINGS……………………………………….26
III. DESCRIPTION OF THE COMPANIES
KIRKLAND’s ®
Headquarters
805 North Parkway
Jackson, TN 38305
731-668-2444 Headquarters
100 Pier 1 Place
Fort Worth, TX 76102
(817) 252-8000 www.kirklands.com www.pier1.com
Fiscal Year End
Saturday closest to January 31st
References: Baker, P. S. (2007). Accounting Essentials for Managers (2nd ed). Richardson, Texas