Menomonee Falls, Wis. – Kohl’s Corp. missed Wall Street forecasts with a generally poor showing in the third quarter of fiscal 2013 that saw the retailer’s net income fell 18% to $177 million from $215 million a year ago. The chain lowered its full-year earnings forecast.
In addition, net sales dropped 1% to $4.44 billion, from $4.49 billion. Same-store sales fell 1.6%.
Kohl’s blamed the unexpected fall in same-store sales, as well as declining margins, for its steep drop in net income. Wall Street analysts had expected a better net income performance and also predicted net sales of $4.55 billion.
Kevin Mansell, chairman, president and CEO of Kohl’s, struck an optimistic tone with comments about the retailer’s holiday marketing efforts driving market share growth.
“As we enter the holiday season, we believe we are well-positioned from a merchandise content and inventory perspective to gain market share,” said Mansell. “We have increased our marketing spending and improved its impact and reach in order to drive higher traffic to our stores and on-line.”
Despite Mansell’s optimism, the chain issued a less than jolly fourth-quarter sales and earnings forecast. The company said it expects total sales to decline between 2% and 4% and same store sales to be flat to down 2%. As a result, Kohl’s forecast fourth quarter profits in the range of $1.59 to $1.74, with analysts’ consensus estimate at $1.69. The retailer lowered its full year profit forecast to a range of $4.08 to $4.23 per share from a prior forecast of $4.15 to $4.35 per share.
Kohl’s also announced new merchandising initiatives involving Juicy Couture and Izod, with the programs hitting stores in the fall of 2014.