Kohl’s Corp reported better-than-expected quarterly profit, helped by better control over inventories and warm weather that boosted sales of summer clothes and accessories.
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Adjusted earnings were $1.22 per share on a 2% revenue decline to $4.18 billion, beating Consensus Matrix estimates for earnings of $1.03 per share and revenue of $4.16 billion. After adjusting for outstanding costs, the company netted $221 million or $1.22 per share, again higher than the figure of $211 million or $1.07 apiece that the company earned past year.
In comparison to a year ago, Kohl’s whittled down the number of stores from 1,164 to 1,150. “We are encouraged by the performance of juniors and young men’s as we enter the back-to-school season”.
Comps declined 1.8% in the second quarter, narrower than the preceding quarter’s decline of 3.9%. During the same period previous year, the firm posted $1.07 earnings per share. This signals that the company’s strategic initiative “Greatness Agenda” is failing to deliver results. Though the plan has helped the company to deliver positive comps in all the four quarters of fiscal 2015, the quarterly growth rates moderated gradually, thus posing a concern.
We note that Kohl’s is struggling since the past many quarters to boost its sluggish top line.
Shares of Macy’s (M) are flying today-and giving a boost to other department store stocks like Nordstrom (JWN), JC Penney (JCP) and Sears (SHLD)-after it beat earnings forecasts and announced that it would close stores. The company ended the quarter with long-term debt of $2.79 billion, flat sequentially. The company also declared a quarterly cash dividend on common stock of $0.50 a unit.
Kohl’s net income rose 7.7 percent to $140 million, or 77 cents per share, in the quarter, from $130 million, or 66 cents per share, a year earlier.
While the company’s cost-cutting measures bore fruit in higher earnings, sales continued to decline. Kohl’s now expects earnings of $3.80 to $4 a share on an adjusted basis, compared with its prior range of 4.05 to $4.25 a share. The retailer has also closed under-performing stores; it now runs 1,150 stores compared to 1,164 stores a year ago.
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The company plans to repurchase shares worth $600 million at an average price of $50 per share.
