DOW JONES NEWSWIRES
Kohl's Corp.'s (KSS) fiscal third-quarter earnings inched up
0.5% as the department-store operator reported higher sales and
improved margins, although operating expenses also grew.
Consumers have been spending a bit more this year though they
remain cautious amid concerns about a sluggish economy and
stubbornly high unemployment headed into the crucial
holiday-selling season. Retailers have stepped up holiday-season
hiring this year and are beginning promotions sooner in an effort
to drive sales.
Rival Macy's Inc. (M) on Wednesday was the first major retailer
to report results for the latest quarter, recovering from a
prior-year loss caused by weak sales and benefiting from its
turnaround strategy that caters to local tastes. The local focus
has allowed it to continue to outpace competitors like Kohl's and
J.C. Penney Co. (JCP), which releases its quarterly results
Friday.
Kohl's--which sells midprice apparel, accessories and home
decor--has benefited from cost cuts and its expansion of its
private label and exclusive brands, like that with designer Vera
Wang. Chairman and Chief Executive Kevin Mansell on Wednesday said
the company "continued to gain market share," while saying strong
management helped expand margins. Gross margin grew to 38.5% from
38%.
Kohl's said it intended to enter into an agreement within "the
next several weeks" to repurchase $1 billion of its common stock,
which would be purchased under a $2.5 billion program that was
announced in 2007, of which $1.9 billion of authorization remains.
Kohl's has a market capitalization of about $16 billion.
For the quarter ended Oct. 31, Kohl's reported a profit of $194
million, up from $193 million a year ago. On a per-share basis,
earnings were flat at 63 cents. The company last month expected 57
cents to 58 cents--the lower end of its prior guidance.
The company said it expects to record adjustments related to
accounting for its leased properties in the third quarter, although
it hasn't fully completed its review. It expects the accounting
review to be complete before filing its third quarter 10-Q, with
the charges likely to range between 5 cents and 15 cents a
share.
Kohl's last week reported total sales rose 4.1% to $4.22 billion
while same-store sales rose 1.8%. A year earlier total sales rose
6.5% while same-store sales were up 2.4%.
The company operates 1,089 stores, up 30 from a year
earlier.
Shares of Kohl's, which affirmed its fourth-quarter earnings and
total sales projections, rose 1.9% to $53.26. The stock is down 3%
this year.
-By Tess Stynes and John Kell, Dow Jones Newswires;
212-416-2481; Tess.Stynes@dowjones.com;