“Kohl’s continues to explore ways to enhance shareholder value through the optimization of its existing store portfolio”, the company said in a statement released Thursday.
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Kohl’s expects full-year earnings to be $4.05 to $4.25 per share. “This strength, however, was substantially offset by softness in early November and in January when demand for cold-weather goods was especially low”, he said.
“As painful as it is to close stores, we applaud Kohl’s for taking action that is necessary in order to compete more effectively in a more complex and challenging retail environment”, Carter Harrison, an analyst at the Conlumino retail research firm, told investors.
Shares of the company, which plans to close 18 underperforming stores this year, were down about 1.9 percent at $44.60 on Thursday.
Mansell said employees at affected stores will be offered a position at another Kohl’s location or a severance package.
The maker of canned soup, Pepperidge Farm cookies and V8 juice posted revenue of $2.2 billion in the period.
Kohl’s estimates the store closings will generate annual savings of about $45 million in cash and $10 million in depreciation.
Kohl’s will open seven new smaller-format stores, about 35,000 square-feet each, in different areas around the country in an attempt to boost sales and cut down on costs.
Kohl’s plans to test a smaller store and get into the outlet business.
Earnings per share for the quarter came in at $1.58, down from $1.83 a year ago, but two cents better than analysts’ average estimate.
Analysts polled by Thomson Reuters had forecast per-share earnings of $1.55 on revenue of $6.39 billion.
Shares in the company, which have tumbled 6.3 percent over the past three months, were inactive premarket. Comparable sales are expected to be flat to up 1% for the year.
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Kohl’s issued a weak annual revenue forecast Thursday after posting a 20 percent drop-off in fourth-quarter profits. The announcement comes, however, as Kohl’s reported this year’s holiday season sales rose a modest.
