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Kohl’s on Thursday said sales rose 16% in the fiscal third quarter, as shoppers turned to its stores and website for clothes and makeup.
The department store raised its forecast for the year, following its better-than-expected performance.
Shares rose about 8% in premarket trading.
Kohl’s is one of the retailers that was hit hard by the pandemic, as Americans spent time at home and had few reasons to refresh their wardrobe or buy new shoes. As consumers get out and about again, it is trying to draw them in with a wider assortment of clothing, including activewear, and a new partnership with Sephora. It has opened about 200 Sephora shops inside of Kohl’s stores and plans to add more.
CEO Michelle Gass said the moves the retailer is making are paying off.
“All of the pieces of our strategy are coming together and we remain incredibly confident in the future of our business,” she said in a news release.
Here’s what the company reported compared with Refinitiv consensus estimates:
- Earnings per share: $1.65 vs. 64 cents expected
- Revenue: $4.6 billion vs. $4.27 billion expected
In the third quarter ended Oct. 30, net income rose to $243 million, or $1.65 per share, from a net loss of $12 million, or 8 cents per share, a year earlier. The results topped the 64 cents per share expected by analysts surveyed by Refinitiv.
Revenue climbed to $4.6 billion from $3.98 billion a year ago, outpacing estimates of $4.27 billion.
Same-store sales, which track sales online and at Kohl’s stores open for at least 12 months, grew 14.7% in the third quarter, topping the 12.5% gain that analysts expected, according to StreetAccount.
The retailer said it now expects to earn between $7.10 and $7.30 per share for the year, excluding charges. Previously, Kohl’s predicted earnings of $5.80 to $6.10 per share.
Along with pandemic-related challenges, Kohl’s had a recent clash with activist investors who raised doubts about the company’s direction and tried to take control of its board. The group of investors —Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital — came to an agreement with the retailer in April and added a few investor-backed independent directors to its board.
Kohl’s said it bought back $506 million of shares in the third quarter and now plans to repurchase a total of $1.3 billion of shares in 2021.
As of Wednesday’s close, Kohl’s shares are up about 39% this year. Shares closed down about 3% to $56.48 on Wednesday, bringing the company’s market share to $8.50 billion.
Read the company’s press release here.
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