Company officials said a lack of store traffic, particularly inits mall stores, hurt sales and brought in just $10.1 million, or51 cents per share, during the quarter ending Jan. 28. That figurewas $1.5 million less than the prior year's profit of $11.6million, or 59 cents per share. Revenue during the period,meanwhile, rose 6% to $153.4 million from $144.3 million a yearearlier.

For the full year, the Jackson,TN-based retailer said it expectsa 25 cent to 35 cent per share profit on sales of between $465million and $480 million. Same-store sales for the year areexpected to range from a 2% increase to a 2% loss, according tocompany officials.Robert E. Alderson, Kirkland's chairman and chiefexecutive officer, said although fourth-quarter earnings were inline with revised estimates issued earlier this month, curtailedcustomer traffic and heavier markdowns took its toll on the bottomline. Even strong category sales were not enough to offset whatAlderson called "a disappointing season."

"Current business conditions led us to a cautious sales outlook,especially for the first half of the year," he said.