UPDATE: Kohl's Net Falls 7.9% As Weak Holiday Pushes Sales Down

Kohl's Corp.'s (KSS) fiscal fourth-quarter earnings fell 7.9% as the department-store chain's disappointing holiday performance led to its first revenue decline in roughly three years.

Shares fell 3.4% to $50.41 in premarket trade, as first-quarter outlook also fell short of expectations.

However, on a per-share basis, the bottom line improved thanks to share buybacks, which helped Kohl's exceed its boosted guidance. The number of shares outstanding were down 15% from a year earlier.

The retailer had recorded an unexpected same-store sales decline during the holiday season, a period that proved far less robust than many retailers had anticipated.

Chairman and Chief Executive Kevin Mansell said Thursday that "we were able to navigate a difficult holiday sales season through strong expense and inventory management."

Kohl's latest results indicated that department-store chain Macy's Inc. (M) may be gaining market share. Macy's--which with strong holiday sales was an exception to the status quo-- recently reported its fourth-quarter profit grew 12%. Peer J.C. Penney Co. (JCP) has been revamping itself and reports its fourth-quarter results Friday.

For the current quarter, Kohl's forecast per-share earnings of 60 cents on a total sales increase of 3%, below recent estimates of analysts polled by Thomson Reuters for a profit of 77 cents and revenue growth of 4% to $4.31 billion.

For the year, the company projected per-share earnings of $4.75 on a total sales increase of 4.5%. Analysts recently expected earnings of $4.95 and revenue growth of 4% to $19.56 billion. The company also projected same-store sales growth of 2%, an acceleration from this year's 0.5% increase.

For the quarter ended Jan. 28, Kohl's reported a profit of $455 million, down from $494 million, a year earlier. However on a per-share basis, earnings rose to $1.81 from $1.66. Earlier this month, the company had raised its earnings guidance to $1.79 to $1.80.

Gross margin eased to 36.2% from 36.8%.

Kohl's recently reported that total sales edged down 0.3% to $6.02 billion. Same-store sales were down 2.1%.

Mansell also noted Thursday that Kohl's e-commerce business reported its first year with $1 billion in revenue.

Kohl's was among a cluster of retailers that guaranteed Christmas delivery for online orders placed later than they did the year prior. The company opened a third e-commerce distribution center last summer, which enhanced its order fulfillment capabilities.

Kohl's operates 1,127 stores, up 3.4% from a year earlier.

-By Tess Stynes and Joan E. Solsman, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com

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