Menomonee Falls, WI—Kohl’s Corp. reported today that its first quarter profit fell 4.5% but the nation’s third largest department store company still managed to beat analysts’ expectations.
For the quarter ended May 4, Kohl’s posted earnings of $147 million, or 66 cents a share, compared to $154 million, or 63 cents a share, a year ago. That was still better than the 57 cents a share that analysts had expected.
Net revenue edged down1% to $4.2 billion while comparable store sales were down 1.9%. Sales missed analysts’ estimate for $4.27 billion. E-commerce sales, however, jumped 31% as Kohl’s continued to invest in new technologies and order fulfillment from its stores.
‘A Lot of Pent-Up Demand’
Gross margin widened to 36.4% from 35.9% while overhead expenses were down by 0.5%.
The company said after a slow start, first quarter sales improved considerably in April, after weather improved in the worst hit regions such as the Midwest, mid-Atlantic states and Northeast. Still, sales of seasonal apparel declined 8%, hurting overall sales.
Kohl’s noted that even with the lowered sales, the company managed to beat expectations thanks to improved gross margin and expense management.
The sales uptick the retailer experienced in April reinforced its projected earnings of $1 to $1.08 a share in its second quarter on sales growth of 1% to 3%. Analysts’ most recent estimate expected $1.05 a share on sales increase of 3%.
“There’s a lot of pent-up demand for spring merchandise out there,” Kevin Mansell, chief executive, said during a conference call with analysts. “We saw some of that breaking loose in April.”