Kohl’s Q1 profit disappoints; on track to open 10, remodel 50 stores in 2011
Menomonee Falls, Wis. — Kohl’s Corp. reported Thursday that first-quarter profit fell 23% on aggressive price cuts, falling to $154 million from $201 million in the year-ago period. Results met internal expectations and goals, but missed Wall Street estimates.
Sales for the quarter ended April 28 edged up 1.9% to $4.2 billion, meeting analysts’ estimates. Same-store sales inched up 0.2%.
According to CEO Kevin Mansell, the department store retailer is adjusting inventories and managing expense to position Kohl’s for sales improvements for the fall season, although the second-quarter profit outlook has been lowered.
Kohl’s said it is on track to open 10 more stores this fall, as well as remodel another 50 in 2012.
Investment in online pays off
ANN ARBOR, Mich. — Walmart has put a considerable amount of time an effort into its digital business, and that appears to have been well worth it as the company achieved an 82, from a prior-year score of 79, on ForeSee’s 2012 rating of Internet retailers. Achieving an 82 is impressive, as a score of 80 is the minimim needed to be considered "superior." The survey scored all retailers on the list out of a 100.
With the lowest score on the list being 69 and the highest being 89, achieved by Amazon.com, most retailers on the list had a score in the 70s, while 36 on the list earned the distinction of scoring 80 or higher. The scores are based on a 100-point scale.
“We’re measuring the biggest players in the game, and they just keep getting better and better. Because customer satisfaction, as we measure it, is predictive, that’s a good sign not only for the consumer experience, but for the bottom line of internet retailers as well,” said study author Larry Freed, president and CEO of ForeSee. “If there’s a negative spin to these positive trends, it is that this puts even more pressure on all other e-retailers to keep up or catch up.”
No online retailer seems to come close to Amazon.com, which climbed three points to 89 to top the list, and is four points higher than the second highest scoring websites, Apple.com (85) and QVC.com (85).
“Amazon continues to set the standard for e-retailers. The truth is that every consumer who has visited Amazon knowingly or unknowingly benchmarks all other experiences against it, and why wouldn’t they? They do everything and they do it well,” said Freed.
Measuring customer satisfication is subjective, so to achieve its list, ForeSee uses individual satisfaction scores for the top 100 e-retailers by revenue as measured by Internet Retailer, quantifies the likely future behaviors of website visitors, including their likelihood to purchase online or offline and proxies for loyalty such as likelihood to return to the site or recommend. When compared to dissatisfied customers, highly satisfied website visitors—those who score their experience 80 or higher—report being 72% more likely to purchase from that retailer’s website and 56% more likely to make the purchase through another channel.
“Highly satisfied website visitors are nearly 70% more likely to recommend the website to others than dissatisfied customers. In the modern world of Facebook, Twitter, and other social media, it is even more imperative to provide the best experience possible to your customers because any experience has huge potential to be amplified, for better or for worse,” said Freed.
To view the complete list, click here.
Kohl’s earnings slip, comps up in Q1
MENOMONEE FALLS, Wis. — Despite dropping from the previous year, Kohl’s said its net income for the first quarter ended April 28 was in line with its expectations. The company reported net income of $154 million (63 cents per diluted share) compared with $201 million ($0.69 per diluted share) a year ago. Net sales were $4.2 billion, an increase of 1.9%for the quarter. Comparable-store sales for the quarter increased 0.2 percent.
Kevin Mansell, Kohl’s chairman, president and CEO, said, “Our first quarter results reflect the implementation of our strategy to initiate lower pricing in order to provide greater value to our customers. This planned action led to significantly lower gross margins for the quarter. Strong management of expenses allowed us to achieve our earnings goal for the quarter. We have accelerated new receipts into second quarter to ensure we are well-positioned from an inventory perspective for the back-to-school season. The combination of these two actions should allow us to greatly improve our sales for the fall season.”
Kohl’s ended the quarter with 1,134 stores in 49 states, compared with 1,097 stores at the same time last year. The company opened nine new stores, including one relocated store, and closed one store during the quarter and plans to open approximately 10 more stores in the fall season. The company plans to remodel approximately 50 stores in 2012.
For the second quarter, Kohl’s expects earnings to range from 96 cents to $1.02 per diluted share. The guidance is based on total sales growth of 2% to 3% and comparable-store sales growth of flat to 1% and includes expected second quarter share repurchases of $250 million. The company maintains its previously announced fiscal 2012 guidance of $4.75 per diluted share.