Shares of home goods retailer Kirkland's fell more than 15 percent Friday after the company's executives guided down their second-quarter financial guidance.

At about 1:10 p.m., Kirkland shares (Ticker: KIRK) were changing hands at $10.82, their lowest point in seven months and some 40 percent below their March highs. Investors were selling in large numbers — volume is set to be at least double the stock's daily average — following word from CEO Robert Alderson that his team has seen "a distinct change in customer sentiment" since late February and doesn't expect an improvement soon.

Alderson lowered Kirkland's second-quarter loss forecast to between 7 cents and 11 cents per diluted share. Analysts had been looking for that loss to be just 3 cents. For all of 2012, Alderson now expects Kirkland's to earn between 87 cents and 97 cents, the midpoint of which is 13 percent below analysts' consensus.

"Our second-quarter outlook reflects the current environment in retail, but does not overshadow the continued investments we are making," Alderson said. "The opportunity for Kirkland’s is to deliver consistent and reasonable sales and earnings growth, and these investments are bringing us closer to achieving that goal. We are focusing intently on merchandising improvement to better leverage our industry leadership in inventory productivity and a loyal customer base."

Kirkland's first-quarter results met the lowered expectations laid out early this month, with earnings per diluted share coming in at 10 cents.