Sales at Kohl's Rise Amid Robust Consumer Spending --3rd Update
August 21 2018 - 1:05PM
Dow Jones News
By Suzanne Kapner and Allison Prang
Retailers extended their run of good news on Tuesday with Kohl's
Corp. and the parent of T.J. Maxx reporting strong quarterly
results.
Kohl's sales excluding newly opened or closed locations rose
3.1% in the three months to Aug. 4. Same-store sales would have
increased 4.3% for the period excluding the effects of a promotion
that shifted into the first quarter this year from the second
quarter last year.
Net sales rose 3.9% to $4.31 billion. Net income rose 40% to
$292 million, compared with $208 million a year ago.
TJX Cos. posted a 6% increase in same-store sales. Sales grew
across all categories, including a 7% increase in its division that
includes the T.J. Maxx and Marshalls chains. Chief Executive Ernie
Herrman said foot traffic was up for the 16th consecutive quarter.
He said the company was attracting new, younger customers and
gaining market share, and noted that the current quarter was "off
to a strong start."
Net sales increased 11.6% to $9.3 billion. Net income rose
nearly 34% to $740 million, compared with $553 million a year
ago
Both companies increased their guidance for the current fiscal
year.
Kohl's results weren't good enough to please investors, who had
already pushed the stock up 45% this year. The shares fell more
than 3% in morning trading to $76.22. TJX shares jumped more than
4% to $106.
"I'm confident the strategies we have in place will position us
for long-term growth," Kohl's Chief Executive Michelle Gass told
analysts on a conference call.
Ms. Gass said the results were driven by a recovery in apparel,
particularly women's clothing. She also noted that Kohl's private
brands had their best performance in over five years.
Americans are spending more on everything from jeans to handbags
to home furnishings as rising wages and lower unemployment boost
disposable income.
The spending spree is helping retailers recover after several
difficult years. Last week, Walmart Inc. said its quarterly sales
rose at the fastest pace in more than a decade. Other retailers,
including Nordstrom Inc. and Home Depot Inc., also reported strong
results.
Kohl's has taken steps to compete in a world increasingly
dominated by online retailers. Last year, it joined with Amazon.com
Inc. to allow shoppers to return items they bought from the online
retailer at a limited number of Kohl's stores. The pilot has since
been expanded to 100 stores.
In September, Kohl's is launching a brand designed in
partnership with Popsugar, a media and technology company. Ms. Gass
said Popsugar will use data from its millennial customers to help
inform the designs.
Next year, Kohl's will introduce the Nine West shoe, handbag and
apparel brands to its stores.
Kohl's now expects earnings per share for the fiscal year to be
$4.96 to $5.36, up from a previous range of $4.86 to $5.31. The
figures include a loss from the extinguishment of debt.
Like other retailers, Kohl's year-over-year comparisons are
skewed by an extra week in fiscal 2017, the result of dividing the
retail calendar in 52 weeks of seven days each, which leaves an
extra day each year.
TJX now forecasts fiscal earnings per share of $4.83 to $4.88,
up from its previous guidance of $4.75 to $4.83.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Allison
Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
August 21, 2018 12:50 ET (16:50 GMT)
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