UPDATE: Kohl's 1Q Profit Up 6% On Higher Sales; Year EPS View Raised

Kohl's Corp.'s (KSS) fiscal first-quarter profit rose 6% as consumers responded to its value-oriented merchandise, which mixes name brands with its own labels and exclusive offerings.

The company raised its per-share earnings forecast for the year to $4.25 to $4.40 from its earlier estimate of $4.05 to $4.25, reflecting the latest results and expected share buybacks.

For the current quarter, the retailer predicted a per-share profit of 96 cents to $1.02. Analysts polled by Thomson Reuters most recently expected $1.

The seller of midprice apparel, accessories and home decor has seen sales rise in recent quarters, helping earnings. Kohl's mixes name brands with its own private label and exclusive offerings. Last year, exclusives and private label merchandise accounted for nearly 50% of sales. Department stores are using their own merchandise and striking exclusive deals with designers with increased frequency as a way of creating uniqueness for customers and differentiating themselves from competitors. Kohl's latest exclusive offering is through a teaming with Lee and Wrangler jeans maker VF Corp. (VFC) to roll out a line of jeans and other apparel under the Rock & Republic brand name.

Macy's Inc. (M) on Wednesday demonstrated the power its own private and exclusive lines are seeing when it posted sharply higher first-quarter results that set the bar for its competitors and put shares at a nearly three-and-a-half-year high. Macy's also gave strong credit to its efforts to tailor merchandise to local tastes.

Kohl's shares are off 2% to $52.50 premarket.

Retailers have benefited from consumer spending holding up despite persistently high unemployment and a weak housing market. Kohl's has ramped up shareholder-friendly efforts this year, adding to its share buyback program and boosting its quarterly payout to shareholders in February.

Kohl's has also set a goal to reach $1 billion in online sales this year and is investing in the business to achieve its objective.

For the quarter ended April 30, Kohl's reported a profit of $211 million, or 73 cents a share, up from $199 million, or 64 cents a share, a year earlier. Last week, the company said it expected per-share earnings at the high end of the 68 cent to 73 cents forecast it had given in February.

The company said last week that total sales rose 3.1% to $4.16 billion on a 1.3% increase in same-store sales. The result missed its February estimate for sales growth of 4% to 6%.

Gross margin was unchanged at 38.1%.

The company ended the period with 1,097 stores, up from 1,067 a year earlier.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com

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