Kohl’s easily tops Street with strong Q2, raises outlook
Kohl’s Corp. exceeded analysts’ sales and earnings estimates for its second quarter led by strong apparel and footwear sales.
Kohl’s profit surged 40.4% to $292 million, or $1.76 per share, for the period ended Aug. 4. Analysts expected earnings of $1.64 a share.
Revenue rose 4% to $4.57 billion, ahead of the $4.26 billion forecast by analysts. Same-store sales rose 3.1%, the chain’s fourth consecutive quarter of positive comp gains.
“We saw strength across the business — both our store and digital channels, all regions of the country, and our proprietary and national brands,” said Michelle Gass, CEO, Kohl’s. “Our men’s and women’s apparel businesses led the company, followed closely by footwear. We also reported higher gross margin as a result of our ongoing focus on inventory management.”
Analyst Neil Saunders, managing director, GlobalData Retail, credited a stronger assortment, presented in a more compelling way, as key reasons for Kohl’s success with customers.
“These have been underpinned by changes to the rewards program which have been rolled out as a trial across a number of markets,” he added. “Initial results from this appear to be encouraging, with customers welcoming the simplified rewards structure and the greater access to sales events and promotions. We are confident that as the changes are made on a national basis, they will generate further uplifts in both customer traffic and sales.” (Click here for more commentary.)
Kohl’s raised its outlook for the full year but it still came up short. It now expects to earn between $4.96 and $5.36 per share, compared with a prior range of between $4.86 and $5.31 a share. Analysts were looking for earnings per share of $5.39.
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