August 14, 2014
Kohl’s exceeded analysts’ profit expectations in the second quarter, but it wasn’t due to top line strength and now the company has a lot riding on the back-to-school season.
The company’s sales for the second quarter ended August 2 declined to $4.242 billion from $4.289 billion and same-store sales fell 1.3% after a slight prior year comp increase of 0.9%. Meanwhile, net income increased slightly to $232 million from $231 million, while earnings per share advanced 8.6% to $1.13 from $1.04, five cents better than analysts’ forecasts. The earnings beat was driven by expense control and increased share repurchase activity, which reduced the number of outstanding shares.
Undeterred by the sales decline and weak underlying profit performance, Kohl’s chairman, president and CEO Kevin Mansell focused on improvements late in the quarter and the company’s positioning for back-to-school.
“We are pleased with the improvement we saw in sales as the quarter progressed,” Mansell said. “The improvement was the most dramatic in the month of July where we achieved a positive comp. As they consistently do, our teams did a great job of managing expenses throughout the quarter. We enter the back-to-school season with fresh, new inventory and encouraging momentum.”
Kohl’s increased its store count by five units during the quarter to end the period with 1,160 stores in 49 states. Four new Kohl’s stores are expected to open this fall.
Source: Retailing Today
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