Kohl’s (KSS) Q1 2021 earnings beat

Vehicles stand in front of a Kohl’s department store in Ashland, Ky.

Luke Sharrett | Bloomberg | Getty Images

Kohl’s shares fell Thursday despite the company reporting earnings and sales for the fiscal quarter that exceeded expectations and exceeded guidance for the full year.

The stock recently fell around 6% in premarket trading.

A similar trend followed at Walmart and Lowe’s, both of which reported strong earnings results earlier in the week and watched their respective stocks lose momentum over the course of the day. Some investors are cautious given the strong demand resulting from the continuation of the pandemic, especially when stimulus checks are issued.

Macy’s shares also rose on positive results released Tuesday and signs of shoppers returning to stores for clothes and luggage, but closed the day.

Neil Saunders, Managing Director of GlobalData Retail, pointed out two years ago that Kohl’s results are also not as strong. Sales were still about 10% lower than in 2019, he noted.

“Given last year’s terrible results, good growth has always been inevitable,” Saunders said of Kohl’s time his stores closed during the Covid health crisis. “While the company is on a steep recovery path, it hasn’t fully dug its way out of the hole that caused the pandemic.”

Here’s how Kohl’s developed for the quarter ended May 1, compared to analyst expectations based on a refinitive survey:

  • Earnings per share: $ 1.05 adjusted versus 4 cents expected
  • Revenue: $ 3.89 billion versus $ 3.48 billion expected

Kohl’s net income rose from a loss of $ 541 million, or $ 3.52 per share last year, to $ 14 million, or 9 cents per share. With no one-off adjustments, the company made $ 1.05 per share, beating expectations for 4 cents, based on a refinitive survey.

Revenue increased nearly 70% from $ 2.43 billion a year ago to $ 3.89 billion. That exceeded expectations for $ 3.48 billion.

The company announced that in-store sales more than doubled for the quarter, while digital sales were up 14% year over year. No sales figures have been published for the same store.

Michelle Gass, Kohl’s chief executive, said momentum had increased throughout the quarter, particularly in stores where the retailer had invested in new private label and refreshing displays for active wear, womenswear and beauty.

Kohl’s expects adjusted earnings per share between $ 3.80 and $ 4.20 for the full year, from $ 2.45 to $ 2.95 previously.

Net sales are estimated to increase in the mid to high teen percentage range compared to the previous expectation of a percentage increase in middle teenagers.

Analysts had been looking for adjusted earnings of $ 3.15 per share, with revenue up 19.3% over the year, according to Refinitiv.

Later in the fall, Kohl’s is preparing to bring beauty retailer Sephora to about 200 of its stores, which will grow to 850 locations by 2023. The company hopes the initiative will help increase traffic and reach a younger customer.

Following the recent debut of the new active line FLX, the company is preparing to launch another group of private labels. Kohl’s is well on the way to expanding its active business to 30% of total sales in the next few years.

At the end of the market on Wednesday, Kohl shares had risen by more than 48% since the beginning of the year. Kohl’s has a market cap of $ 9.5 billion, which is significantly higher than that of Macy’s and Nordstrom.

You can find the results report from Kohl’s here.

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