Kohl’s Q4 Profit Drops But Still Beat Forecast

In Industry News, Reports, What's New by Jeff PrineLeave a Comment

One of Kohl's exclusive brands Simply Vera by Vera Wang

One of Kohl’s exclusive brands Simply Vera by Vera Wang

Menomonee Falls, WI—Kohl’s Corp. reported today that its fourth quarter profit fell 12% as sales weakened in the holiday quarter.

For the quarter ended Feb., the department store posted a profit of $334 million, or $1.56 a share, compared with a profit of $378 million, or $1.66 a share, a year ago. That was below Kohl’s own forecast but still enough to beat analysts’ estimate for $1.54 a share.

Net revenue fell 12% to $6.1 billion which was in line with analysts’ forecasts. Comparable store sales were down 2% (also in line with estimates).

But Maintained Margin

Kohl’s is amid a change in its merchandise strategy to move away from an assortment dominated by its exclusive brands and add a wider selection of national brands.

According to Kevin Mansell, Kohl’s chairman/president/ceo, November/December holiday sales showed consumers were responding favorably to the new

Moreover, “despite increased shipping costs related to our e-commerce business, we were able to achieve our gross margin guidance for the quarter. We believe our inventory levels and assortment are well-positioned as we transition into the spring season,” Mansell added.

Indeed, Kohl’s gross margin widened to 34% from 33.3%.

For its 2013 totals, Kohl’s earned $889 million, or $4.05 a share, vs. $986 million, or $4.17 a share, in 2012. Annual revenue edged down 1% to $19.03 billion as comp store sales fell 1.2%.

Looking toward 2014, Kohl’s forecast full year earnings of $4.05 to $4.45 a share with revenue expected to rise 0.5% to 2.5%, or about $19.12 billion to $19.5 billion.

Analysts forecast full-year earnings of $4.40 a share on revenue of $19.34 billion.