Kohl's Corp. (KSS) fiscal second-quarter earnings rose a
better-than-expected 14% as the department-store chain reported
improved sales and stronger margins.
But the company forecast third-quarter earnings of 57 cents to
63 cents a share, with revenue up 4.5% to 6.5% and same-store-sales
growth of 2% to 4%. Analysts, according to Thomson Reuters,
recently projected a 74-cent profit and 6% revenue growth to $4.29
billion.
While giving a cautious fourth-quarter view as well, Kohl's
lowered the top end of the year's earnings target by a nickel.
Though retailers got off to a strong start this year, consumer
sentiment has weakened in recent months and some analysts expect
rougher going for the sector in the second half, when performance
will be compared with the prior year when the economy seemed to be
mending. Macy's Inc. (M) in the latest quarter saw demand improve
from last year's weak levels, leading it to boost its projections
for this year.
For the quarter ended July 31, Kohl's reported a profit of $260
million, or 84 cents a share, up from $229 million, or 75 cents a
share, a year earlier. Kohl's last week boosted its earnings view
to 80 cents to 82 cents.
Gross margin edged up to 40.3% from 40% on stronger sales and
inventory management.
Chairman and Chief Executive Kevin Mansell said Thursday the
company continued to gain market share in the quarter. The company
last week reported total sales rose 7.7% to $4.1 billion and
same-store sales increased 4.6% as transactions continued to
increase.
The company said it will operate 1,089 stores by the end of next
month, up from 1,022 a year earlier.
Shares closed Wednesday at $47.78 and were inactive premarket.
The stock is down 11% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;