June 21, 2018 6:12 AM ET

Specialty Retail

Company Overview of The Kitchen Collection, LLC

Company Overview

The Kitchen Collection, LLC operates as a housewares retailer in the United States. The company sells small appliances, bake ware, kitchen gadgets, cookware, cutlery, tableware, food products, decorative wood products, and marble and ceramics. It also sells factory overstocks, warehouse clearance items, and other special products. The company sells products through its stores located in traditional and outlet malls; and online stores. The company was founded in 1980 and is based in Chillicothe, Ohio. The Kitchen Collection, LLC operates as a subsidiary of Nacco Industries Inc.

71 East Water Street

Chillicothe, OH 45601

United States

Founded in 1980

Phone:

740-773-9150

Fax:

740-774-0593

Key Executives for The Kitchen Collection, LLC

Chief Executive Officer and Director
Age: 55
Compensation as of Fiscal Year 2017.

The Kitchen Collection, LLC Key Developments

The Kitchen Collection, LLC Reports Unaudited Earnings Results for the First Quarter Ended March 31, 2018; Provides Earnings Guidance for the First Half, Second Half and Full Year of 2018

The Kitchen Collection, LLC reported unaudited earnings results for the first quarter ended March 31, 2018. For the quarter, the company reported a net loss of $3.64 million and revenues of $22.1 million for the first quarter of 2018 compared with a net loss of $2.143 million and revenues of $26.665 million for the first quarter of 2017. Loss before income tax expense was $4.34 million compared to $3.33 million a year ago. Operating loss was $4.304 million compared to $3.28 million a year ago. Despite effectively maintaining strong gross margins and closing unprofitable stores, these steps could not combat the effect of continued declines in customer traffic to stores. The decreases in revenues and operating results were primarily due to lower comparable store sales from reduced customer traffic and a shift to lower-priced products, which resulted in a decline in the number of store transactions and a decrease in the average sales transaction value. The loss of sales from closing 13 underperforming stores since March 31, 2017 also contributed to the decline in revenues, but had a modestly positive effect on operating results. The 2018 first quarter net loss increased from the prior year quarter due to an increased operating loss and a decrease in the effective income tax rate under the new U.S. tax reform legislation, which resulted in a smaller tax benefit on the seasonally higher pre-tax loss. Capital expenditure was $116,000 against $253,000 a year ago. Net cash used in operating activities was $10,898,000 against $10,685,000 a year ago. As a result of these initiatives, and the first quarter 2018 store closings, the company expects full year 2018 revenues to decrease moderately compared with 2017. Kitchen Collection plans to continue to focus on maintaining strong gross margins, controlling operating expenses and optimizing working capital. However, without an increase in store traffic, the company expects the 2018 operating and net losses to be higher than in 2017. Capital expenditures are expected to be approximately $0.5 million in 2018, of which $0.1 million was expended in the first quarter of 2018. The net loss in the first half of 2018 is expected to be higher than in the first half of 2017 partially resulting from a smaller tax benefit realized on the seasonally higher first half loss. Improvements in operating profit in the second half of 2018 compared with the second half of 2017, as well as the benefit of the lower effective income tax rate on pre-tax income, are expected to result in an increase in net income in the second half of 2018, but not enough to offset the higher net loss in the first half of the year.

the Kitchen Collection, Llc Reports Earnings Results for the Third and Nine Months Ended September 30, 2017; Provides Earnings Guidance for the Fourth Quarter and Full Years 2017 and 2018

The Kitchen Collection, LLC reported earnings results for the third and nine months ended September 30, 2017. Forthe reported revenues of $28.6 million for the third quarter of 2017 compared with revenues of $32.9 million for the third quarter of 2016 and a net loss of $1.2 million for the third quarter of 2017 compared with net loss of $0.7 million for the third quarter of 2016. The decrease in Revenue was primarily due to a decline in comparable store sales and the loss of sales from closing 19 underperforming stores since September 30, 2016. The decrease in comparable store sales was mainly attributable to a decline in customer traffic, which resulted in a decline in the number of store transactions and a decrease in the average sales transaction value. Sales at newly opened Kitchen Collection® stores partially offset the revenue decrease. The 2017 third-quarter net loss increased primarily as a result of the decrease in comparable store sales partially offset by lower headquarters operating expenses. For the nine months ended September 30, 2017, Kitchen Collection reported a net loss of $5.3 million and revenues of $81.2 million compared with a net loss of $4.5 million and revenues of $89.9 million for the nine months ended September 30, 2016. The company anticipates revenues and results to continue to decline in the 2017 fourth quarter and for the 2017 full year compared with the respective 2016 periods. Capital expenditures are expected to be $0.7 million in the fourth quarter of 2017 and $1.4 million for the 2017 full year. The company expects revenues in 2018 to decrease compared with 2017 as it continues to prudently close non-performing stores. Kitchen Collection's goal is to deliver breakeven results in 2018. However, this objective could be challenged if the results of the fourth-quarter 2017 holiday-selling season are lower than expected requiring adjustments to 2018 expectations, if pending renegotiations of rent commitments are not as successful as expected and if 2018 store traffic is not at expected levels. Due to forecasted working capital changes and capital expenditures, cash flow before financing activities is expected to result in a modest use of cash in 2018. Capital expenditures are expected to be approximately $0.7 million.

Kitchen Collection Announces Earnings Results for the Second Quarter and Six Months Ended June 30, 2017; Provides Earnings Guidance for the Second Half and Full Year of 2017

Kitchen Collection announced earnings results for the second quarter and six months ended June 30, 2017. For the quarter, the company reported revenues of $25.9 million compared with revenues of $28.6 million for the second quarter of 2016 and a net loss of $2.0 million for both of the 2017 and 2016 second quarters. The decrease in Revenue was primarily due to the effect of closing 20 underperforming stores since June 30, 2016 and a decline in comparable store sales. The decrease in comparable store sales was mainly attributable to fewer customer visits, which also resulted in a decline in the number of store transactions. Despite a decrease in revenues, the second quarter 2017 net loss was comparable to the prior year quarter. For the six months, the company reported a net loss of $4.1 million and revenues of $52.5 million compared with a net loss of $3.8 million and revenues of $57.0 million for the six months ended June 30, 2016. The company provided earnings guidance for the second half and full year of 2017. The company anticipates revenues and results to continue to decline in the second half of 2017 compared with the second half of 2016, with full-year 2017 operating results also expected to decrease compared with 2016. The company expects 2017 cash flow before financing activities to be close to break even. Capital expenditures are expected to be approximately $1.5 million in 2017, of which $0.5 million was expended in the first half of 2017.

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