Kohl’s Delivers Earnings Surprise as Turnaround Shows Potential
Samantha McDonald
Business Editor
Investors appeared upbeat on Kohl’s Corp. on the heels of its better-than-expected fourth-quarter financial results.
The Menomonee Falls, Wis.-based company delivered adjusted earnings per share of $1.99, beating analysts’ estimates of $1.88, on profits of $265 million. Revenues for the same period ended Feb. 1 rose 4.5% to $6.83 billion, also trouncing expectations of $6.52 billion, while same-store sales were flat, versus a forecasted drop of 0.1%.
As of 9:00 a.m. ET, shares for Kohl’s were up about 5%. Looking ahead, Kohl’s is calling for fiscal year 2020 earnings per share in the range of $4.20 and $4.60 and comps in the range of up or down 1%.
“While 2019 was a year in which our financial results did not meet our expectations, it was also a year of innovation and investment that further strengthened Kohl’s differentiation in the market,” CEO Michelle Gass said in a statement. “We are encouraged by the acceleration of traffic and new customer acquisition in our stores and online, driven by the unprecedented level of new brands and partnerships we launched during the year.”
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The report comes during a period of transformation for Kohl’s, which has continued to face challenges as it executes a turnaround plan that has been slow to yield the promised results.
After the holiday shopping season, the retailer joined a string of nationwide chains that posted disappointing sales results. Despite a push to capture millennial shoppers and a high-profile partnership with Amazon, Kohl’s comps for the months of November and December declined 0.2% from the previous year, and the firm noted weakness in its women’s business.
Further, just three weeks ago, Kohl’s confirmed that it was eliminating 250 jobs, as well as announced changes to other positions in its corporate offices, as part of its restructuring efforts. (The firm said it would not be shuttering any stores as part of the layoffs.)
“The organizational changes we’ve made are driven by the evolution of our strategic business priorities to create a more agile and empowered organization to support our long-term sustainable growth,” SVP of communications Jen Johnson said at the time.
The firm is set to host its investor day on March 16 in New York City.
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