Shares of Kirkland’s Inc. KIRK, -4.87% tumbled 5.6% toward a 10-year low in morning trade Wednesday, after the home decor retailer was downgraded at B. Riley FBR, citing increasing headwinds that will likely limit a profit recovery. Analyst Jeff Van Sinderen cut his rating to neutral, after being at buy since March 2017, and slashed his price target to $6.50 from $12.00. Van Sinderen now expects the company’s turnaround initiatives will take longer to gain traction as a number of headwinds are intensifying: After an “OK” 2018, the broader home goods market “appears to have slowed substantially;” promotional levels have elevated because of the slowdown; and “the tariff picture has deteriorated” as the U.S.-China trade war intensifies. “Although KIRK has undertaken admirable turnaround initiatives, our sense is that in the current increasingly difficult environment, the company will need to accelerate various programs aimed at improving content, merchandise margin, traffic/omnichannel/e-com, and overall relevance, in order to deliver a turnaround,” Van Sinderen wrote in a note to clients. “Acceleration can only happen so fast.” The stock, which is on track for the lowest close since April 2, 2009, has plunged 47.1% year to date, while the SPDR S&P Retail ETF XRT, -0.14% has gained 4.5% and the S&P 500 SPX, +0.69% has tacked on 13.5%.

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