-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 LXMGmo/ZAAT2YW08ZnWF4KH7UaMVIWxN6dTBDNXW1nV/d26lahxeKXCf78cHHkxO
 93BLx5i/xzNGbNXbmRRAYQ==

<SEC-DOCUMENT>0001299933-08-002854.txt : 20080604
<SEC-HEADER>0001299933-08-002854.hdr.sgml : 20080604
<ACCEPTANCE-DATETIME>20080604163951
ACCESSION NUMBER:		0001299933-08-002854
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20080530
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080604
DATE AS OF CHANGE:		20080604

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KIRKLAND'S, INC
		CENTRAL INDEX KEY:			0001056285
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RETAIL STORES, NEC [5990]
		IRS NUMBER:				621287151
		FISCAL YEAR END:			0128

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-49885
		FILM NUMBER:		08881027

	BUSINESS ADDRESS:	
		STREET 1:		431 SMITH LANE
		CITY:			JACKSON
		STATE:			TN
		ZIP:			38301
		BUSINESS PHONE:		731-668-2444

	MAIL ADDRESS:	
		STREET 1:		431 SMITH LANE
		CITY:			JACKSON
		STATE:			TN
		ZIP:			38301

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KIRKLANDS INC
		DATE OF NAME CHANGE:	19980219
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_27529.htm
<DESCRIPTION>LIVE FILING
<TEXT>
<!-- CoverPageHeader start -->
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> Kirkland's, Inc. (Form: 8-K) </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">
<A NAME="DOCUMENT_TOP">&nbsp;</A>
<P>
<!-- CoverPageHeader end --><!-- CoverPageTitle START -->
<A NAME="DOCUMENT_TOP">&nbsp;</A>
<HR NOSHADE>
<P>
<P ALIGN="CENTER">
<FONT SIZE="4">
		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
</FONT>
<BR>
<FONT SIZE="2">
	WASHINGTON, D.C. 20549
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="5">
	FORM 8-K
</FONT>
<FONT SIZE="2">

</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="3">
	CURRENT REPORT
</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
</FONT>
</P>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="51%">
	&nbsp;
</TD>
<TD WIDTH="5%">
	&nbsp;
</TD>
<TD WIDTH="44%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Date of Report (Date of Earliest Event Reported):
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	May 30, 2008
</FONT>
</TD>
</TR>
</TABLE>
<BR>
</CENTER>
<!-- CoverPageTitle END --><!-- CoverPageRegistrant START -->
<P ALIGN="CENTER"><!-- -->
<FONT SIZE="6">
	Kirkland's, Inc.
</FONT>
<FONT SIZE="2">
<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
</FONT>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="33%">
	&nbsp;
</TD>
<TD WIDTH="34%">
	&nbsp;
</TD>
<TD WIDTH="33%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Tennessee
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	000-49885
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	621287151
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________________<BR>
	(State or other jurisdiction
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________<BR>
	(Commission
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
______________<BR>
	(I.R.S. Employer
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	of incorporation)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	File Number)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Identification No.)
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	431 Smith Lane, Jackson, Tennessee
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	38301
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_________________________________<BR>
	(Address of principal executive offices)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
___________<BR>
	(Zip Code)
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
<TD WIDTH="51%">
	&nbsp;
</TD>
<TD WIDTH="5%">
	&nbsp;
</TD>
<TD WIDTH="44%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Registrant&#146;s telephone number, including area code:
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	731-988-3600
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="2">
	&nbsp;
</FONT>
<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
</P>
<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
</P></FONT><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 2.02 Results of Operations and Financial Condition.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
On May 30, 2008, Kirkland's Inc. (the "Company") issued a press release and conducted a conference call regarding its sales and earnings results for its first fiscal quarter ended May 3, 2008 (the "Press Release"). A copy of the press release and transcript of the conference call conducted by the Company are attached hereto as exhibit 99.1 and exhibit 99.2, respectively, and are being furnished, not filed, under item 2.02 of this Report on Form 8-K. <br><br>
</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 9.01 Financial Statements and Exhibits.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
(d) Exhibits<br><br>99.1 Press Release dated May 30, 2008 announcing the Company's first quarter of fiscal 2008 financial results.<br><br>99.2 Transcript of May 30, 2008 conference call conducted by the Company <br><br>
</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><P ALIGN="LEFT" STYLE="FONT-SIZE: 10PT"></P><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><!-- SignatureHeader START -->
<P ALIGN="CENTER">
<FONT SIZE="2">
<B>
	SIGNATURES
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
	Pursuant to the requirements of the Securities Exchange Act of 1934, the
	registrant has duly caused this report to be signed on its behalf by the
	undersigned hereunto duly authorized.
</FONT>
</P>
<!-- SignatureHeader END --><!-- Signature START -->
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="19%">
	&nbsp;
</TD>
<TD WIDTH="34%">
	&nbsp;
</TD>
<TD WIDTH="3%">
	&nbsp;
</TD>
<TD WIDTH="1%">
	&nbsp;
</TD>
<TD WIDTH="43%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD COLSPAN="3" VALIGN="TOP" ALIGN="LEFT">
<FONT SIZE="2">
	Kirkland's, Inc.
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
<I>
	June 4, 2008
</I>
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	By:
</I>
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	/s/ W. Michael Madden
</I>
<BR>
</FONT>
</TD>
</TR>
<TR>
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<HR SIZE="1" NOSHADE>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Name: W. Michael Madden
</I>
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Title: Senior Vice President and Chief Financial Officer
</I>
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<!-- Signature END --><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><P ALIGN="CENTER">
<FONT SIZE="2">
	Exhibit&nbsp;Index
</FONT>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="BOTTOM">
<TD WIDTH="8%">
	&nbsp;
</TD>
<TD WIDTH="15%">
	&nbsp;
</TD>
<TD WIDTH="77%">
	&nbsp;
</TD>
</TR>

<BR>
<TR VALIGN="BOTTOM">
<TD NOWRAP ALIGN="LEFT">
<FONT SIZE="1">
<B>
	Exhibit No.
</B>
</FONT>
</TD>
<TD>
<FONT SIZE="1">
	&nbsp;
</FONT>
</TD>
<TD NOWRAP ALIGN="LEFT">
<FONT SIZE="1">
<B>
	Description
</B>
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD NOWRAP ALIGN="CENTER">
<HR SIZE="1" NOSHADE>
</TD>
<TD>
<FONT SIZE="1">
	&nbsp;
</FONT>
</TD>
<TD NOWRAP ALIGN="CENTER">
<HR ALIGN="LEFT" SIZE="1" WIDTH="88%" NOSHADE>
</TD>
</TR>





<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" WIDTH="8%" nowrap>
<FONT SIZE="2">
<DIV ALIGN="LEFT">
	99.1
</DIV>
</FONT>
</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Press Release dated May 30, 2008 announcing the Company's first quarter fiscal financial results
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" WIDTH="8%" nowrap>
<FONT SIZE="2">
<DIV ALIGN="LEFT">
	99.2
</DIV>
</FONT>
</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Transcript of May 30, 2008 conference call conducted by the Company
</FONT>
</TD>
</TR></TABLE></CENTER><!-- HTMLFooter START -->
</BODY>
</HTML>
<!-- HTMLFooter END -->
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>EX-99.1
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> EX-99.1 </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">

<BODY style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt"><FONT style="font-size: 22pt">News Release
</FONT>

<P align="left" style="font-size: 22pt"><FONT style="font-size: 11.5pt">Contact: W. Michael Madden
</FONT>


<P align="left" style="margin-left:4%; font-size: 11.5pt; text-indent: 4%">Senior Vice President &#038; CFO



<P align="left" style="margin-left:4%; font-size: 11.5pt; text-indent: 4%">(615)&nbsp;872-4995


<P align="left" style="font-size: 11.5pt"><FONT style="font-size: 12.5pt"><B>KIRKLAND&#146;S REPORTS FIRST QUARTER RESULTS</B>
</FONT>

<P align="left" style="font-size: 12.5pt"><FONT style="font-size: 11pt">JACKSON, Tenn. (May&nbsp;30, 2008) &#151; Kirkland&#146;s, Inc. (NASDAQ: KIRK) today reported financial
results for the 13-week period ended May&nbsp;3, 2008.
</FONT>

<P align="left" style="font-size: 11pt">Net sales for the 13-week period ended May&nbsp;3, 2008, increased 2.1% to $84.1&nbsp;million from
</FONT><FONT style="font-size: 11.5pt">$82.3&nbsp;million </FONT><FONT style="font-size: 11pt">for the 13-week period ended May&nbsp;5, 2007. Comparable store sales for the
first quarter of fiscal 2008 increased 4.3% compared with an 18.8% comparable stores sales decrease
in the first quarter of fiscal 2007. Comparable store sales in mall stores increased 9.3% for the
first quarter, and comparable store sales in off-mall stores increased 2.0%. The Company opened 2
stores and closed 12 stores during the quarter to end the period with 325 stores.
</FONT>

<P align="left" style="font-size: 11pt">The Company reported a net loss of $2.6&nbsp;million, or $0.13 per diluted share, for the 13-week period
ended May&nbsp;3, 2008, compared with a net loss of $7.5&nbsp;million, or $0.38 per diluted share, in the
13-week period ended May&nbsp;5, 2007. The reported net loss for the first quarter of fiscal 2008
included no tax benefit for the period, while the reported net loss for the first quarter of fiscal
2007 included a tax benefit of $5.0&nbsp;million, or $0.26 per diluted share.


<P align="left" style="font-size: 11pt">Robert Alderson, Kirkland&#146;s President and Chief Executive Officer, said, &#147;The first quarter results
reflect strong merchandising execution and the benefits of aggressive financial initiatives that
have reduced our operating costs, improved cash flow and strengthened our liquidity. During the
quarter, we experienced improved customer conversions as shoppers have reacted very favorably to
our merchandise mix. The positive comparable store sales and trimming of unproductive stores led to
leveraging of occupancy and distribution costs. Combined with an improvement in merchandise margin
and a year-over-year reduction in operating costs of almost $5&nbsp;million, we were able to post a
significant improvement in our pre-tax results.


<P align="left" style="font-size: 11pt">&#147;We are encouraged by this start to fiscal 2008 and the demonstrated benefits of our merchandising
and financial initiatives. We anticipate that our sequential quarterly results will fluctuate as we
progress through the year, but we are confident we will post significant year-over-year improvement
in each quarter during fiscal 2008.&#148;


<P align="left" style="font-size: 11pt"><I>Investor Conference Call and Web Simulcast</I>
<BR>
Kirkland&#146;s will host a conference call on May&nbsp;30, 2008, at 11:00&nbsp;a.m. ET to discuss its results of
operations for the first quarter of fiscal 2008. The number to call for this interactive
teleconference is (303)&nbsp;262-2130. A replay of the conference call will be available through June&nbsp;6,
2008, by dialing (303)&nbsp;590-3000 and entering the confirmation number, 11113357#.


<P align="left" style="font-size: 11pt">The live broadcast of Kirkland&#146;s quarterly conference call will be available online at the
Company&#146;s website, <U>www.kirklands.com</U>, or at
<U>http://www.videonewswire.com/event.asp?id=48252</U> on May&nbsp;30, 2008, beginning at 11:00&nbsp;a.m.
ET. The online replay will follow shortly after the call and continue through June&nbsp;6, 2008.


<P align="center" style="font-size: 11pt">-MORE-<BR>
431 Smith Lane &#150; Jackson, Tennessee 38301 &#150; 731-988-3600



<P align="left" style="font-size: 11pt">KIRK Reports First Quarter Results
<BR>
Page 2
<BR>
May&nbsp;30, 2008


<P align="left" style="font-size: 11pt">Kirkland&#146;s, Inc. was founded in 1966 and is a specialty retailer of home d&#233;cor in the United
States.&nbsp; Although originally focused in the Southeast, the Company has grown beyond that region and
currently operates 325 stores in 34 states.&nbsp; The Company&#146;s stores present a broad selection of
distinctive merchandise, including framed art, mirrors, candles, lamps, picture frames, accent
rugs, garden accessories and artificial floral products.&nbsp; The Company&#146;s stores also offer an
extensive assortment of gifts, as well as seasonal merchandise.&nbsp; More information can be found at
<U>www.kirklands.com</U>.


<P align="left" style="font-size: 11pt"><I>Except for historical information contained herein, the statements in this release are
forward-looking and made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and
uncertainties, which may cause Kirkland&#146;s actual results to differ materially from forecasted
results. Those risks and uncertainties include, among other things, the competitive environment in
the home d&#233;cor industry in general and in Kirkland&#146;s specific market areas, inflation, product
availability and growth opportunities, seasonal fluctuations, and economic conditions in general.
Those and other risks are more fully described in Kirkland&#146;s filings with the Securities and
Exchange Commission, including the Company&#146;s Annual Report on </I><I>Form 10-K</I><I> filed on May&nbsp;1, 2008.
Kirkland&#146;s disclaims any obligation to update any such factors or to publicly announce results of
any revisions to any of the forward-looking statements contained herein to reflect future events or
developments.</I>


<P align="center" style="font-size: 11pt">-MORE-



<P align="left" style="font-size: 11pt"><FONT style="font-size: 11.5pt">KIRK Reports First Quarter Results
<BR>
Page 3
<BR>
May&nbsp;30, 2008
</FONT>

<P align="left" style="font-size: 11.5pt"><FONT style="font-size: 12pt">KIRKLAND&#146;S, INC.
<BR>
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<BR>
(dollars in thousands, except per share amounts)
</FONT>
<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>13 Week Period Ended</B></TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">May 3,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">May 5,</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">84,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">82,314</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,083</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,231</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Operating expenses:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Other operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,639</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,017</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Store impairment charge</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">273</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Operating loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,825</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(12,698</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(31</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(179</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(272</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(58</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Loss before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,552</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(12,488</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income tax benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,989</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Net loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2,552</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(7,499</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.38</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.38</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Shares used to calculated earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,483</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,483</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 12pt">-MORE-




<P align="center" style="font-size: 10pt; display: none">1
<!-- PAGEBREAK -->




<P align="left" style="font-size: 12pt"><FONT style="font-size: 11.5pt">KIRK Reports First Quarter Results
<BR>
Page 4
<BR>
May&nbsp;30, 2008
</FONT>

<P align="left" style="font-size: 11.5pt"><FONT style="font-size: 12pt">KIRKLAND&#146;S, INC.
<BR>
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
<BR>
(dollars in thousands)
</FONT>
<DIV align="center">
<TABLE style="font-size: 11pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 11pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 3, 2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">February 2, 2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 5, 2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">ASSETS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Inventories, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,578</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,221</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,172</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:40px; text-indent:-10px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,937</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,686</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69,547</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,727</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">113,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">122,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">134,960</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">LIABILITIES AND SHAREHOLDERS&#146; EQUITY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Revolving line of credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,442</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,985</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,521</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,764</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,191</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Deferred rent and other long-term
liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,210</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,160</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73,577</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,351</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total liabilities and shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">113,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">122,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">134,960</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 11pt"><FONT style="font-size: 12pt">-MORE-</FONT>



<P align="left" style="font-size: 12pt"><FONT style="font-size: 11.5pt">KIRK Reports First Quarter Results
<BR>
Page 5
<BR>
May&nbsp;30, 2008
</FONT>

<P align="left" style="font-size: 11.5pt"><FONT style="font-size: 12pt">KIRKLAND&#146;S, INC.
<BR>
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<BR>
(dollars in thousands)
</FONT>
<DIV align="center">
<TABLE style="font-size: 11pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="63%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR style="font-size: 11pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">13 Week Period Ended</TD>
</TR>
<TR style="font-size: 11pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 3, 2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 5, 2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net cash provided by (used in):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(22,879</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(433</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,662</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,476</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash and cash equivalents:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Net decrease</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(152</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(25,065</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,358</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD><DIV style="margin-left:30px; text-indent:-10px">End of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 11pt">-END-




<P align="center" style="font-size: 10pt; display: none">2


<!-- v.060107 -->
</BODY>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exhibit2.htm
<DESCRIPTION>EX-99.2
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> EX-99.2 </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">

<BODY style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 10pt; font-variant: SMALL-CAPS"><B>Final Transcript</B></FONT></DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 20pt"><B>Conference Call Transcript</B><BR></FONT>
<FONT style="font-size: 14pt"><B>KIRK &#151; Q1 2008 Kirkland&#146;s, Inc. Earnings Conference Call</B><BR></FONT>
<FONT style="font-size: 12pt"><B>Event Date/Time: May. 30. 2008 / 11:00AM ET</B></FONT></DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><FONT style="font-size: 9pt"><B>CORPORATE PARTICIPANTS</B>
</FONT>

<P align="left" style="font-size: 9pt"><FONT style="font-size: 8pt"> <B>Tripp Sullivan</B>
</FONT>

<P align="left" style="font-size: 8pt"><I>Kirkland&#146;s, Inc. &#151; Corporate Communications</I>


<P align="left" style="font-size: 8pt"><B>Robert Alderson</B>


<P align="left" style="font-size: 8pt"><I>Kirkland&#146;s, Inc. &#151; President and CEO</I>


<P align="left" style="font-size: 8pt"><B>Mike Madden</B>


<P align="left" style="font-size: 8pt"><I>Kirkland&#146;s, Inc. &#151; SVP and CFO</I>


<P align="left" style="font-size: 8pt"><FONT style="font-size: 9pt"><B>CONFERENCE CALL PARTICIPANTS</B>
</FONT>

<P align="left" style="font-size: 9pt"><FONT style="font-size: 8pt"> <B>David Mackie</B>
</FONT>

<P align="left" style="font-size: 8pt"><I>Suntrust Robinson Humphrey &#151; Analyst</I>


<P align="left" style="font-size: 8pt"><B>Neely Tamminga</B>


<P align="left" style="font-size: 8pt"><I>Piper Jaffray &#151; Analyst</I>


<P align="left" style="font-size: 8pt"><B>Brad Leonard</B>


<P align="left" style="font-size: 8pt"><I>BML Capital Management &#151; Analyst</I>


<P align="left" style="font-size: 8pt"><B>Ronnie Scott</B>


<P align="left" style="font-size: 8pt"><I>JRS Investments &#151; Analyst</I>


<P align="left" style="font-size: 8pt"><B>Ellen White</B>


<P align="left" style="font-size: 8pt"><I>Brice Goebbler &#151; Analyst</I>


<P align="left" style="font-size: 8pt"><FONT style="font-size: 9pt"> <B>PRESENTATION</B>
</FONT>

<P align="left" style="font-size: 9pt"><FONT style="font-size: 8pt"><B>Operator</B>
</FONT>

<P align="left" style="font-size: 8pt">Good day, everyone, and welcome to the Kirkland&#146;s, Inc. conference call. Today&#146;s call is being
recorded. At this time for opening remarks and introductions, I would like to turn the call over to
Mr.&nbsp;Tripp Sullivan of Corporate Communications. Please go ahead, Sir.


<P align="left" style="font-size: 8pt"><B>Tripp Sullivan </B><B><I>- Kirkland&#146;s, Inc. &#151; Corporate Communications</I></B>


<P align="left" style="font-size: 8pt">Good morning and welcome to this Kirkland&#146;s, Inc. conference call to review the Company&#146;s
results for the first quarter of fiscal 2008. On the call this morning are Robert Alderson,
President and Chief Executive Officer, and Mike Madden, Senior Vice President and Chief Financial
Officer.


<P align="left" style="font-size: 8pt">The results as well as notice and the accessibility in this conference call on a listen-only basis
over the Internet were released earlier this morning in a press release that has been covered by
the financial media. Except for historical information discussed during this conference call, the
statements made by Company management are forward-looking and made pursuant to the Safe Harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties which may cause Kirkland&#146;s actual results in
future periods to differ materially from forecasted results. Those risks and uncertainties are more
fully described in Kirkland&#146;s filings with the Securities and Exchange Commission, including the
Company&#146;s annual report on Form 10-K filed on May&nbsp;1, 2008.


<P align="left" style="font-size: 8pt">With that said I&#146;ll turn the call over to you, Robert.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Thanks, Tripp, and good morning, everyone. We appreciate you joining us.


<P align="left" style="font-size: 8pt">For the first time in quite a while I am pleased to report an improvement in our sales trends and
earnings performance. Our positive comp sales performance in the first quarter broke a streak of 15
consecutive quarters of negative comp sales. Importantly this sales advance featured higher
merchandise margins and the benefit of operating expense reductions taken late last year. The
combination of these improved operating results and the execution of potential initiatives we
announced last fall led to much improved cash flow during the quarter and a strengthened liquidity
position.


<P align="left" style="font-size: 8pt">Mike will now walk you through the first quarter financial statements and the progress on our
financial initiatives. Mike?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">Thank you, Robert. Good morning. I will start with the review of the financial statements.


<P align="left" style="font-size: 8pt">For the first quarter ended May 3rd, 2008, we reported a net loss of $2.6&nbsp;million or $0.13 per
share as compared to a net loss of $7.5&nbsp;million or $0.38 per share in the prior year quarter.


<P align="left" style="font-size: 8pt">On a pre-tax basis, the loss for the quarter was $2.6&nbsp;million compared to a loss of $12.5&nbsp;million
for the prior year quarter. Net sales for the quarter increased to $84.1&nbsp;million from $82.3&nbsp;million
for the prior year quarter. Comparable store sales increased 4.3% for the quarter. Comp sales
increased 9.3% in our mall stores and 2% in our off-mall stores. Our remaining mall store group
faced easier comp comparisons in the first quarter.


<P align="left" style="font-size: 8pt">The overall comp sales increase was driven by higher transaction counts, partially offset by a
slight decline in the average ticket. Transactions were up 6%, reflecting flat traffic trends and
higher customer conversion rates. The average ticket decreased approximately 1.5%, reflecting a
decrease in the average retail selling price partially offset by an increase in items per
transaction.


<P align="left" style="font-size: 8pt">From a merchandising standpoint, our strongest categories were art, lamps and furniture, each
performing with a strong sell-through and improved margin.


<P align="left" style="font-size: 8pt">In real estate we opened two stores during the quarter and enclosed 12 stores. At the end of the
quarter, we operated 325 stores, 214 off-mall stores and 111 mall stores, representing a 66%
off-mall, 34% mall venue distribution. Total square footage under lease decreased 1.3% versus the
prior year quarter while total store units declined by 6%.


<P align="left" style="font-size: 8pt">Gross profit margin for the quarter increased to 32% of sales from 27% in the prior year quarter.
The components of reported gross profit margin were as follows. Merchandise margin increased 170
basis points as a percentage of sales as a result of strong, early sell-through of new merchandise
resulting in fewer markdowns.


<P align="left" style="font-size: 8pt">Additionally, promotion activity was down significantly to resulting in less pressure on
merchandise margins. The use of coupons was very limited during the quarter as compared to the
heavy use of coupons in a variety of formats during the prior year quarter.


<P align="left" style="font-size: 8pt">Store occupancy cost decreased 310 basis points as a percentage of sales, primarily the result of
leverage from the sales increase. The closing of underperforming stores as well as several
favorable lease renewals also contributed to the improvement in the ratio. Central distribution
cost decreased 10 basis points as a percentage of sales as a result of leverage due to the sales
increase.


<P align="left" style="font-size: 8pt">Freight cost decreased 10 basis points as a percentage of sales, reflecting the shift to lower cost
direct-to-store delivery methods from our distribution center to our stores as well as a sales
increase. We anticipate continued benefit from this shift in the second quarter of 2008. However,
higher freight cost associated with rising diesel fuel prices are partially offsetting this
benefit. The impact of rising fuel cost is likely to provide additional pressure on freight cost as
the year progresses.


<P align="left" style="font-size: 8pt">Operating expenses for the quarter were $24.7&nbsp;million or 29.4% of sales as compared to $29.6
million or 36% of sales in the prior year quarter. Within this line item, store level operating
expenses decreased 470 basis points as a percentage of sales for the quarter. Just over half the
decrease at the store level or $2.4&nbsp;million was the result of reduction in marketing expenses.


<P align="left" style="font-size: 8pt">In the prior year quarter, we ran several newspaper inserts and also spent additional advertising
dollars to promote our theme to merchandise offerings. The inserts and theme promotion material
were eliminated this quarter and our advertising spend was devoted to in-store collateral, signage
and e-mail communication. Payroll expenses also declined as a percentage of sales as a result of
sales leverage and tight control.


<P align="left" style="font-size: 8pt">At the corporate level, our expense ratio decreased 190 basis points as compared to the prior year
quarter. A decrease in payroll costs and related benefits as a result of personnel reductions taken
during late 2007 combined with the sales leverage led to the favorable comparison. Depreciation and
amortization decreased 50 basis points as a percentage of sales, reflecting the increase in sales,
a reduction in capital expenditures and the closure of underperforming stores.


<P align="left" style="font-size: 8pt">During the quarter we recorded charges of $352,000 related to the impairment of fixed assets
associated with underperforming store locations. During the first quarter of last year, we recorded
$273,000 of impairment charges.


<P align="left" style="font-size: 8pt">Net interest income was lower than the prior year quarter, reflecting a lower starting cash balance
in the current year. Other income increased to $272,000 in this quarter from $58,000 in the prior
year quarter. The current year results include the sale of our corporate airplane which resulted in
a gain of $213,000.


<P align="left" style="font-size: 8pt">As a result of the valuation allowance on our deferred tax assets and our cumulative losses in
recent annual periods, there was no income tax benefit recorded for the quarter. In the prior year
quarter we recorded an income tax benefit of $5&nbsp;million or 40% of pre-tax loss.


<P align="left" style="font-size: 8pt">Turning to the balance sheet, inventories at May&nbsp;3, 2008 were $41.6&nbsp;million or $128,000 per store
as compared to $49.2&nbsp;million or $142,000 per store at May&nbsp;5, 2007. This level of inventory was
consistent with our plan for the end of the quarter. We planned in the second quarter with
inventory levels in the range of $44&nbsp;million to $45&nbsp;million or about 6% below the prior year.


<P align="left" style="font-size: 8pt">As of the end of the first quarter, inventories were current with 94% of on hand inventory less
than six months old. At the end of the quarter we had $5.7&nbsp;million in cash and no borrowings
outstanding under our revolving credit line. We ended the first quarter last year with minimal cash
on hand and borrowings outstanding of $1.4&nbsp;million. As of the end of the quarter, total
availability under our credit line was approximately $26&nbsp;million. Accounts payable levels declined
slightly versus the prior year as a result of the lower inventory levels and the timing and amount
of inventory flow.


<P align="left" style="font-size: 8pt">For the quarter, capital expenditures were $1.2&nbsp;million, most of which related to the construction
of two new stores during the quarter. This amount reflects gross capital expenditures before
landlord allowances. We expect capital expenditures to range between $3 and $4&nbsp;million for fiscal
2008. Net of landlord allowances, our capital expenditures are expected to total $2&nbsp;million to $3
million for the year.


<P align="left" style="font-size: 8pt">As we&#146;ve discussed previously, we are not providing quarterly or annual earnings and comp guidance
at this time. Economic conditions are still uncertain with several prominent factors, such as
rising fuel prices, affecting consumers. Furthermore while we are encouraged by a
better-than-expected start to 2008, we are many mindful that the first quarter comparisons were
soft. We know that it&#146;ll take much more than one solid quarter to achieve our goal of returning to
profitability and building upon that foundation.


<P align="left" style="font-size: 8pt">Before turning it back to Robert, I will provide a brief update on some of the cash flow
initiatives we put into place late last year. As it relates to the store activity, we opened two
new stores in the first quarter and have commitments for two more stores for the balance of the
year. Depending on the progress of the business and the available real estate opportunity, we may
pursue an additional deal or two if they provide lower risk and clearly evident cash flow benefits.


<P align="left" style="font-size: 8pt">These additional deals represent relocations of existing productive properties that are at the end
of leases. We believe that this period of refocusing on our core store base is healthy. If positive
trends continue we will remain cautious but continue to add or replace highly profitable stores in
proven markets.


<P align="left" style="font-size: 8pt">Our store closing strategy remains the same. We are aggressively pursuing closures of unproductive
stores and continue to make progress. During the first quarters, we closed 12 stores. We continue
to evaluate each of our upcoming exit opportunities closely, with cash flow and profitability being
the key metrics in our decision making. The recent improvement in our operating results impacts
this analysis and each store has its own circumstances. It is truly a case-by-case analysis.


<P align="left" style="font-size: 8pt">But the current expectations for additional closings in fiscal 2008 is around 25 stores, heavily
weighted toward the end of the year. This would amount to total closings for the fiscal year in the
range of 35 to 40 stores.


<P align="left" style="font-size: 8pt">We also placed two non-essential assets up for sale, our former corporate headquarters building and
our corporate airplane. The sale of the airplane closed during the first quarter of 2008. The sale
resulted in net cash proceeds of approximately $816,000. The building is now vacant and we have
moved our Jackson personnel to offices in our distribution center. The building is currently under
option for sale and we are increasingly confident that we will complete the sale in 2008.


<P align="left" style="font-size: 8pt">We received $1.9&nbsp;million of our expected $2.8&nbsp;million tax refund during the first quarter. The
remaining $900,000 is expected to be received during the second quarter.


<P align="left" style="font-size: 8pt">The first quarter results have provided a substantial boost to our cash flow and our balance sheet
position. As a result as of today, we are still not in a borrowing position, and we expect limited
borrowings under our credit facility until the peak inventory periods in the late third and early
fourth quarter. Even during that peak time frame, we expect borrowing levels to be significantly
below the peak level of $21&nbsp;million in the prior year.


<P align="left" style="font-size: 8pt">I&#146;ll turn it back over to Robert for an update on our business.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Thanks, Mike. Although we are still early in the year, it is really gratifying to talk with
you about greatly improved financial performance in the first quarter. When we last reported to you
on March&nbsp;25 we were able to give you a glimpse of the turnaround in progress in merchandising and
to update you on our progress on financial initiatives begun last year.


<P align="left" style="font-size: 8pt">Financial moves were comprehensive and sometimes painful to execute but we have a highly motivated,
loyal, and disciplined organization and it has embraced the challenge to position Kirkland&#146;s for a
return to success. We significantly cut expenses and we&#146;ve delivered beyond plan as Mike reported.
We are committed to maintain the same level of expense discipline throughout the year to maximize
our results and to help counter the adverse effects of dramatically higher energy costs.


<P align="left" style="font-size: 8pt">Beginning in the fall of last year we set the stage to dramatically reduce our 2008 store growth,
which reduced our cash need for this year. New store openings so far have been outstanding but
limited. This reduction has also had the salutary effect of allowing us the opportunity and luxury,
if you will, to focus on improving our existing store base, store level training and (inaudible)
improvement.


<P align="left" style="font-size: 8pt">We successfully managed our inventory levels to plan which for the first half is approximately 10%
below prior year levels on average, and as a result our stores are easier to manage and visual
presentations are sharper. We have and will periodically adjust our inventory levels to the run
rate of the business to maximize results.


<P align="left" style="font-size: 8pt">With respect to inventory our objective is as much about the quality of the content and how we
maximize our return on the investment as it is to managing to plan. We continue to pay great
attention to opportunities to squeeze expenses out of inventory-related logistical operations as we
further evaluate our options in a world featuring ever-higher transportation costs as a given, at
least in the near and midterm.


<P align="left" style="font-size: 8pt">We have taken action to dispose of unneeded corporate assets. As Mike said we sold our corporate
aircraft utilized by our store operations group. Our move of some of our headquarters staff to
Nashville has helped mitigate the loss of quick reaction and access that the aircraft afforded to
our store operators. We have our former headquarters building in Jackson under option for sale and
we will report to you as and when we can on how that plays out.


<P align="left" style="font-size: 8pt">These actions combined with improved operating results have provided Kirkland&#146;s with a much
improved balance sheet as we added cash through operating results for the quarter. Liquidity
remains the central focus for our 2008 plan. It is very important to note that our actions to
improve cash accumulation are also accomplished against a backdrop of dramatically reduced cash
need in 2008. We have no long-term debt and currently have no borrowings outstanding under our line
of credit while having ample availability for the year. As Mike said we expect borrowings to the
limited until the peak inventory buildup in the fall. Even then we expect borrowing levels to be
much lower than the prior year.


<P align="left" style="font-size: 8pt">So we had an encouraging first quarter. Our first quarter of positive comp sales following 15
negative quarters. So how are we doing so far in the second quarter?


<P align="left" style="font-size: 8pt">Happily I can report that our trends from the first quarter have continued in both sales and margin
improvement. The comparisons on the sales line will get a little tougher as we move later into the
quarter and year. We are obviously pleased but we should all understand that it is a struggle that
won&#146;t get any easier with a severely stressed consumer.


<P align="left" style="font-size: 8pt">We certainly weren&#146;t in synch with our customer in 2007 and we had some inappropriately priced and
conceived product. However, our team tried very hard to sell it and aggressively market it to our
customers, albeit to the detriment of margin.


<P align="left" style="font-size: 8pt">This year is different and, in spite of very difficult economic conditions, we are doing a good job
in our merchandise selection and pricing and continue to offer a strong value statement within a
continually fresh inventory offering. We expect improved financial results to continue throughout
the year, but the level of discounting employed last year from mid-May to year-end 2007 suggests
that our most reliable opportunity to improve annual earnings is improved product margin.


<P align="left" style="font-size: 8pt">What is driving the improvement in year-to-date in merchandising? Our team is acutely focused on
delivering consistent value in units and making the stores more interesting the (technical
difficulty).


<P align="left" style="font-size: 8pt">Also we spent about half of the first quarter working very hard on the components of our
merchandise mix. And as a consequence we believe that we are cleaner than we have been in recent
years and that the work done in the first six weeks of the first quarter will contribute positively
to the suggested margin improvement in the back half.


<P align="left" style="font-size: 8pt">So what about results over the balance of the year? We are taking it a day, a week and a quarter at
a time so that we don&#146;t lose focus on what is important and because it is impossible at this time
to accurately predict the course of the economy and its effect on the consumer. We have seen some
recent meager, better news in the housing market in the form of slightly increased construction
activity and arguably less than &#091;severe and&#093; forecasted foreclosure activity.


<P align="left" style="font-size: 8pt">If sustained that is good for Kirkland&#146;s and especially for our suburban off-mall stores where the
housing issues and commuting costs due to energy prices are the most impactful. Our pared-down mall
group was a surprisingly strong contributor during the first quarter and promises to continue this
trend throughout the year. Our opportunity to return to profitability remains on the sales and
margin lines and I am reasonably confident from internal trends in the merchandise work we&#146;ve done
for Q2 through 4 that we will improve our financial results in each quarter versus the prior year
period.


<P align="left" style="font-size: 8pt">Our annual results and ability to return to profitability this year, as always, will depend heavily
on the fourth quarter. We are proceeding conservatively with our seasonal merchandise spend,
working with quantities and spreads that are risk &#091;aversive&#093;, while seeking content which allows us
to attract customers and compete aggressively for their business in what will surely be a very
competitive retail environment.


<P align="left" style="font-size: 8pt">We are encouraged by our early year-to-date results. Our team is excited to experience positive
customer reaction to the product for the first time in a while. We are aware of the challenges and
that the year is going to be a day-to-day struggle. We believe that as a value retailer and a fun
place to shop, Kirkland&#146;s is uniquely positioned in a stressed financial environment to improve
profitability and to build liquidity over the course of the year.


<P align="left" style="font-size: 8pt">We appreciate and are strengthened by our challenges. We hope to see you in our stores very soon.
Thank you for your time and interest.


<P align="left" style="font-size: 8pt">Operator, Mike and I are available for questions from our listeners.


<P align="left" style="font-size: 8pt"><FONT style="font-variant: SMALL-CAPS"> </FONT><FONT style="font-size: 9pt"></FONT><B>QUESTION AND ANSWER</B>
</FONT>

<P align="left" style="font-size: 9pt"><FONT style="font-size: 8pt"><B>Operator</B>
</FONT>

<P align="left" style="font-size: 8pt">(OPERATOR INSTRUCTIONS). David &#091;Mackie&#093; with SunTrust Robinson Humphrey.


<P align="left" style="font-size: 8pt"><B>David Mackie </B><B><I>- Suntrust Robinson Humphrey &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Thank you and congratulations, guys, on the quarter. Just a couple of questions. Could you
talk a little bit about the &#151; some of the regional differences that you are seeing as far as sales
performance and has there been any trend line changes in the regions?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">David, this is Mike. It is somewhat similar. We, in the first quarter, saw really good
performance out of Texas which is a state with a lot of stores. We have over 50 stores in Texas. So
that was a big positive.


<P align="left" style="font-size: 8pt">Beyond that, it&#146;s pretty sporadic. I think what we&#146;re seeing on the downside is more Florida and
out into the Southwest like Arizona, Nevada region where we saw some negative comps out there. So
not altogether different from what we have been saying but moderation, overall, in the other areas
of the country.


<P align="left" style="font-size: 8pt"><B>David Mackie </B><B><I>- Suntrust Robinson Humphrey &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">I think you had mentioned last quarter that you had more off-mall stores on a relative basis
in Florida and that may be a reason why there is a performance differential between mall and
off-mall. Is that still the case in the first quarter?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">I think that is still the case, David. South Florida, particularly from Orlando down and
particularly over on the Gulf Coast in the Naples area and then south of Miami, have been
particularly difficult. I don&#146;t think we are going to see a big change down there until we see
improved &#151; an improved economy and some return to a better housing market.


<P align="left" style="font-size: 8pt">So I think that is probably with as for a while. But &#151; and we do have a lot of new growth down
there so that will be the case as you said.


<P align="left" style="font-size: 8pt"><B>David Mackie </B><B><I>- Suntrust Robinson Humphrey &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">But your off-mall stores in other parts of the country are performing better relative to the
mall stores?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">Yes. In terms of volume and profitability, that&#146;s still &#151; we are much better results coming
out of the off-mall stores.


<P align="left" style="font-size: 8pt"><B>David Mackie </B><B><I>- Suntrust Robinson Humphrey &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">And then just the last question, what are you seeing right now with regard to sourcing costs
overseas?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">We are seeing, I think really for the first time, in sort of over the last &#151; well, over the
last part of the fourth quarter and then through the early part of the calendar year, we have seen
more pressure on pricing in China. China still is the &#151; that&#146;s the place where you have to do the
bulk of your work. It is not really possible to take a great deal &#151; you can take some of it to
other places, but it is not that much cheaper any &#151; at least in our experience.


<P align="left" style="font-size: 8pt">We think this is going to continue. There are a lot of things that contribute to it. Petroleum
prices certainly are a part of that, but rebate expirations, regulatory changes in China, the
currency valuation differential has certainly been something that has been probably the most
troubling thing. Because it&#146;s been a little bit difficult to price out because of uncertainty about
the direction of the U.S. dollar.


<P align="left" style="font-size: 8pt">So we&#146;ve had a bit of strengthening lately and some indication that the government recognizes the
dollar needs to stabilize and both the other way and if that happens, that will certainly be
helpful to the pricing situation. However, the transportation side of it in terms of container
costs, the cost to move it from the coast to distribution centers in the stores, is going to
continue to be challenging. And the pressure on price at the source, I think, is going to continue
to be with us for a while.


<P align="left" style="font-size: 8pt"><B>David Mackie </B><B><I>- Suntrust Robinson Humphrey &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Thanks, Robert. Good luck here.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Thank you, David. Appreciate it.


<P align="left" style="font-size: 8pt"><B>Operator</B>


<P align="left" style="font-size: 8pt">Neely Tamminga with Piper Jaffray.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Good morning guys and congratulations on being the single largest performing stock in my
portfolio year-to-date.


<P align="left" style="font-size: 8pt">All right. So here&#146;s the deal. Just &#151; I know you don&#146;t want to give specific guidance, but is it
at all feasible to think that you could be making money this year?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">Well, yes, we don&#146;t want to give specific guidance. I think what we can say though is we have
done a lot of things on the expense side, we feel pretty good about the margin opportunity that we
have, and beyond that, I think Robert said it well. I mean, we are taking it day-to-day,
week-by-week, quarter-by-quarter and we will see where that gets us. I mean we got off to a pretty
good start though.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Well I guess in view of that, I mean, Robert, you indicated that the trends continue positive.
Did you actually seen an acceleration, a deceleration or are they just kind of still status quo
where we ended on the quarter? I&#146;m just trying to get of bigger than a bread box more than an
elephant (inaudible)?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">You know I think it would be best to talk about it at this point as sort of being very similar
to last. I think sort of flattish or closer to flat on the sales line, but I anticipate more margin
improvement in the second quarter and beyond. It is going to happen in different ways over the
course of the year and I think we just have to adjust to the conditions as we find them.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">I hear what you are saying about freight and, obviously, that&#146;s a pressure for everyone right
now. I&#146;m just wondering are we talking like 10sies, 20sies, in terms of the impact on the margin or
is this like you are preparing us for the 100 to 200 basis points &#091;mix shift&#093;?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">It&#146;s a little difficult to tell right now. We are in negotiation on our contract for
containers. And that &#151; they are just going to cost more to ship container from China to Long
Beach.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Are they adding store charges? Is that really the case?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Pardon?


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Are they adding surcharges? Is that where the increase costs are coming from?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Yes, that&#146;s the primary piece of the increase and it&#146;s no longer &#151; it is very difficult now
to lock prices on the steamship for the containers because of variable surcharges that are starting
to get into place. And we all &#151; you see the diesel prices every time you drive by the gasoline
stations today and there are a lot of people who have hedged their fuel but, at some point, all
those price increases are going to work their way through the system.


<P align="left" style="font-size: 8pt">I think it is just really difficult to tell right now what the annualized effect of all of this is.
We will talk to you again, I guess &#151; what? August, Mike, something like that?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">Late August.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Late August and I think we will have some visibility about that at the time. Maybe we could
add to that discussion then as it relates to Kirkland&#146;s, and I think there will be a lot of
industry information that will be out there by then.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Just a couple more follow-up questions. I guess a housekeeping question first and then I will
get to the philosophical question. The housekeeping question being, you said the mall stores are
actually performing quite well from a comp basis. Is this simply just the math of removing the
laggards of closing mall-based stores or are you seeing this only door for door type basis?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">I think that it&#146;s a little bit of easier comparisons for the group that we had in the comp
base in the first quarter and a removal of a lot of the underperformers. I think those are the
major factors.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">I agree with that. But I would say that it&#146;s encouraging to see traffic and conversion and
other metrics (inaudible)&nbsp;transaction to be up there also. So the mall story is one that I think is
surprising, a little bit surprising that it has been as strong as it has been. And we will see how
that plays out over the course of the year.


<P align="left" style="font-size: 8pt">There may be some transportation effect. Some people have begun to opine that there&#146;s a
transportation effect that will actually benefit malls as we go through the balance of the year as
the shopper reacts to seeing more and doing more in a single location. And we will see how that
plays out. I don&#146;t know that there is anything definable yet.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">I guess that&#146;s a good bridge into the philosophical question here, Robert, is do you think the
improvement in conversion is much more specific to just simply having the right merchandise? Or is
it having the right merchandise plus just simply better in-store execution?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">I think it is some of all of that. At the end of the day, if you don&#146;t have the right product,
you can&#146;t make a sale. It doesn&#146;t matter how good your official presentation looks or how well your
staff works with the customer. You just have to have the product and you also have to have it
priced right.


<P align="left" style="font-size: 8pt">What I would say the difference between this year and last year is that we are much better priced
in terms of the things that we have in the store more realistically priced at what it should sell
for. And we have the margin spreads and doing that, we&#146;ve bought it better.


<P align="left" style="font-size: 8pt">I think the other thing we have done is we have called it out to the customer better. We&#146;ve really
returned to a much more of a treasure hunt within the stores. We are very much item-focused about
everything. We are not buying a single thing if we don&#146;t think it will stand on its own and all of
the promotional things that we are doing in the store, we bought for those.


<P align="left" style="font-size: 8pt">We are flipping a store literally every two weeks in terms of the big ideas that we want to sell to
the customers. So they are seeing new windows, new front of the store, new promotions, new
collateral, different callouts on ideas that we think would be important to them.


<P align="left" style="font-size: 8pt">I think we have also within our entire merchandise group done a much better job of planning the
merchandise mix and executing it. There&#146;s been I believe a real focus on quality as well as
newness. And we have re-established with a lot of vendors that were very successful with us in
prior years that had drifted away, and they have been delivering some great new ideas and all of
those things are important to a decision, whether you buy or not, especially in a time when the
consumer doesn&#146;t always have a lot of extra money if it&#146;s going in their gasoline tank.


<P align="left" style="font-size: 8pt"><B>Neely Tamminga </B><B><I>- Piper Jaffray &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Absolutely. Congratulations, guys, and keep up the good work, okay?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Thank you very much. We appreciate your support.


<P align="left" style="font-size: 8pt"><B>Operator</B>


<P align="left" style="font-size: 8pt">Brad Leonard with BML Capital Management.


<P align="left" style="font-size: 8pt"><B>Brad Leonard </B><B><I>- BML Capital Management &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Robert, Mike, nice job on the quarter.


<P align="left" style="font-size: 8pt">I just was cutting out when you guys were talking about the trends in May on the comp trends. Did
you say they were similar to last quarter or &#151; ? I just missed a lot of that.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Similar to last quarter.


<P align="left" style="font-size: 8pt"><B>Brad Leonard </B><B><I>- BML Capital Management &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Okay. Appreciate it. Thanks. That&#146;s all I have.


<P align="left" style="font-size: 8pt"><B>Operator</B>


<P align="left" style="font-size: 8pt">&#091;Mal Griswold&#093; with &#091;JRS Investments&#093;.


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">This is &#091;Ronnie Scott&#093; with Mal here at JRS. First of all yes, congratulations on a great
quarter.


<P align="left" style="font-size: 8pt">Just a couple of things here if you would comment on, first of all, there was a filing made
somebody down in your neck of the woods down around Jackson, I think. Did they accumulate or make a
filing, as owning more than 5% of your stock. Could you comment on that? Do you know them or &#151;?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">That&#146;s BML Capital Management, they are not in Jackson. We filed that a few weeks ago and &#151; .


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">BML &#151; ?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">I don&#146;t really have any &#151; I mean it&#146;s just a filing that&#146;s required.


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Okay. BML, do you know what that stands for or &#151;?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">I don&#146;t. I&#146;m not &#151; I don&#146;t know.


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">All right. I was just wondering if you could comment on this whole thing going on with the
housing and I know you mentioned earlier if obviously things improved and that will be good for
Kirkland&#146;s. But is there some kind of thing working here that maybe you are benefiting through some
relocations and people having to move from owning to renting and fixing up their places? With all
the things that are happening with these foreclosures and people moving from owning to renting and
so forth?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">No, Ronnie. I really don&#146;t think so. I think you look for silver linings and opportunities at
all times. But I think we are much better served by a stable to robust housing market, where you&#146;ve
got a lot of new construction and where you also have people moving into and fixing up older homes.
And so &#151; I would also say this, in the last &#151; say the period 2005, 6 and into 7, I think we had a
lot less gift merchandise in our store and we had walked away from a lot of the impulse fundings
that we do and I talked about this a bit on the call last time.


<P align="left" style="font-size: 8pt">We are not, I don&#146;t believe we are quite as dependent on selling pure home decor as we were the
last three years. That doesn&#146;t mean that that&#146;s not still a huge part of our business and it&#146;s not
very important. But we try to adjust with the times and with what the customer tells us they&#146;re
interested in.


<P align="left" style="font-size: 8pt">And so if you are in our store today, you might see some things that would surprise you a bit and
&#151; for example, I will give you a specific example. During the week before and the week of Mother&#146;s
Day, our store both in the store set and in the offering was very heavily oriented toward gift
stuff. And we hit it just exactly right in terms of what we offered and how we timed it and the
amounts and we had a terrific week. That was a big lead off for second quarter which is good.


<P align="left" style="font-size: 8pt">You have to make some of those decisions and get them right during the course of the year to have a
good year. And I think that&#146;s what the sort of thing that we are doing now much more than we have
in the past. So rather have a big, rather have a booming market or at least a stable and nicely
progressing market as opposed to having the one that we have right now.


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Yes. Speaking of your stores, I was in your store in Augusta back in April and it was pretty
busy in there and just went in and browsed around and looked around and it was a very good
experience.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Thanks.


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Okay, the headquarters business building is under option, so is this &#151; obviously you got a
price. Will that result in a gain if it closes or how much or can you comment on that?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">I had rather not comment on it until we actually have a transaction. We have an option. That&#146;s
different than it was the last time we talked to you. We felt that we needed to tell you that
because we had announced we were disposing of a couple of major assets that the Company had.


<P align="left" style="font-size: 8pt">That&#146;s the only piece of real estate that we own. And when and if it&#146;s disposed of, we will tell
you all about it.


<P align="left" style="font-size: 8pt"><B>Ronnie Scott </B><B><I>- JRS Investments &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">So, that was my other question. That is the only piece of real estate you own, everything else
is leased up.


<P align="left" style="font-size: 8pt">Last call, you had talked about you had about &#151; I think the number was around 90 stores that you
were looking hard at, that the leases ran out, that you could close in &#145;08 if you so chose. And I
think you mentioned earlier you got about 25 more that you are looking at to &#151; maybe you close
later on in the year. Is that &#151; can you talk a little bit about that?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">I think that is the plan right now as we look at the opportunities that we have, we&#146;ve already
closed a few as we mentioned and we will close about 25 more or so. But we&#146;ll evaluate every one of
those.


<P align="left" style="font-size: 8pt">You know stores, the viability of a store at the end of the day is certainly about location and
co-tenancy and a lot of things. But it is also about the content that you sell and how much
customer appreciation that you are able to generate for that content. So the better your content is
and the better you operate it, the better store it is and I&#146;ve said before on these calls that
Kirkland&#146;s has not had a real estate problem over the last three years. It has had a merchandising
problem.


<P align="left" style="font-size: 8pt">And when you address that, then some of these stores are going to look better because they are
going to perform better. And so we are trying to be very, very careful and as Mike, I think, very
clearly said the evaluation of whether or not we keep a store or not will be of course whether or
not we can continue with that landlord or we have the right to. And we can make a deal and whether
or not it makes sense to do it financially.


<P align="left" style="font-size: 8pt"><B>Operator</B>


<P align="left" style="font-size: 8pt">(OPERATOR INSTRUCTIONS). &#091;Ellen White&#093; with &#091;Brice Goebbler&#093;.


<P align="left" style="font-size: 8pt"><B>Ellen White </B><B><I>- Brice Goebbler &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Good morning. I am wondering if you could tell me a little bit about the lease renegotiation
part of your real estate business? What percentage of your current store base would that pertain
to? And how do you feel about those kind of negotiations right now?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">I think we said we had roughly 90 opportunities between now and midyear 2009 to exit. And that
would be by either lease expiration or a kick out or a co-tenancy event or some other event that
would give us a right to exit the lease.


<P align="left" style="font-size: 8pt">90 stores on a 325 store base is 25, 27% of the store base. That is pretty drastic and I think you
would only do that if you were going to close all of those. It would be a signal there&#146;s a lot
wrong and with an improved merchandising capability, we don&#146;t think we&#146;ll have to do it.


<P align="left" style="font-size: 8pt">The negotiation itself really depends on the strength of the property and the landlord involved and
what sort of historical deal base that you are working from. Most of the renegotiations that we do
are short term, ranging from a year to three years, and they typically involve a move to percentage
rent and some ability to shorten even that term of the lease on the part of either the landlord or
the tenant if there is a change in circumstances.


<P align="left" style="font-size: 8pt">So what we&#146;re trying to do is preserve a location that cash flows, where we can improve the four
wall contribution of that store and if we can do that then we will do it if it makes sense for us
in the long-term. So it&#146;s a really &#151; you know, we agonize over these. There is a lot that goes
into this and our store and financial and real estate teams really dig in hard and all we can
really do at this time is sort of tell you the results because I think that is what is important.


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">Ellen, yes, it&#146;s truly a case-by-case and in some cases what we are looking to do is relocate
that store. Because a lot of these that Robert mentioned are mall stores that we&#146;ve had for quite a
while and it is probably time for a refresh or, in the current strategy, looking outside the mall
for a dominant center that we can do better business in and make more money. So in a lot of cases
that is what we are looking to do.


<P align="left" style="font-size: 8pt"><B>Ellen White </B><B><I>- Brice Goebbler &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Are you &#151; let me ask another question about this. Do you think that the landlords, given the
current environment, is it getting to be an easier negotiation in any way for you guys?


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Well, if they have vacancy, significant vacancy, it&#146;s a reasonably easy negotiation, I guess.
It depends on how you compare it. I&#146;m not trying to avoid answering you in any way, but it truly is
case-by-case and sometimes it depends on the landlord. There are landlords that &#151; I won&#146;t mention
any names, but there are landlord&#146;s that are just difficult and they would be difficult if the
whole mall was empty. And there are some that are very reasonable and very realistic and, simply,
you are trying to maximize the return of their funds from operations so that their REIT can be very
successful. And it depends whether they are owned by a family or whether they are REIT sometimes,
too.


<P align="left" style="font-size: 8pt"><B>Ellen White </B><B><I>- Brice Goebbler &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Okay. Next question, comps. What kind of comp do you all need to leverage your business?


<P align="left" style="font-size: 8pt"><B>Mike Madden </B><B><I>- Kirkland&#146;s, Inc. &#151; SVP and CFO</I></B>


<P align="left" style="font-size: 8pt">I would say in the normal scenario we need three comps or so. But this year we are going to be
seeing the benefit of the expense reductions we&#146;ve had and some other cost reductions that we made
in late &#145;07 and end of this year in addition to a better margin. So when you are able to get those
two things going in the right direction, you don&#146;t need the comp that you normally would need.


<P align="left" style="font-size: 8pt">But if we get on a more consistent run rate on all the facets of the income statement, I would say
2.5%, 3% comp. Does that &#151; ? (inaudible)&nbsp;answers your question.


<P align="left" style="font-size: 8pt"><B>Ellen White </B><B><I>- Brice Goebbler &#151; Analyst</I></B>


<P align="left" style="font-size: 8pt">Yes. Absolutely. That&#146;s great. Thank you, guys, so much.


<P align="left" style="font-size: 8pt"><B>Operator</B>


<P align="left" style="font-size: 8pt">We have no further questions. I&#146;d like to turn the call back over to Mr.&nbsp;Alderson for closing
remarks. Please go ahead.


<P align="left" style="font-size: 8pt"><B>Robert Alderson </B><B><I>- Kirkland&#146;s, Inc. &#151; President and CEO</I></B>


<P align="left" style="font-size: 8pt">Thanks, everyone. We appreciate you joining us today and for your interest in the Company and
we look forward to talking with you in August. Thanks.


<P align="left" style="font-size: 8pt"><B>Operator</B>


<P align="left" style="font-size: 8pt">Thank you, ladies and gentlemen. That does conclude our conference for today. Thank you for
your participation and for using ACT. You may now disconnect.



<P align="center" style="font-size: 10pt; display: none">


<!-- v.060107 -->
</BODY>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
