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Friday, March 1, 2024

Kohl’s sees holiday-quarter revenue down 10%, but says sales strengthened toward end of January

  • Kohl's released preliminary fourth-quarter results, anticipating sales will be down about 10% year over year, and same-store sales will drop 11%.
  • Analysts had been calling for a revenue decline of 8.9%, according to Refinitiv.
  • CEO Michelle Gass said sales strengthened as the company worked through its latest quarter, and shopper demand picked up in the new year.

A view outside a Kohl's store in Miramar, Florida.Johnny Louis | Getty Images

Kohl's CEO Michelle Gass said the retailer got a boost at the end of the holiday quarter thanks, in part, to the influx of shoppers coming to its stores to make Amazon returns.

The department store chain on Thursday said it anticipates fiscal fourth-quarter revenue to be down about 10% year over year, and same-store sales to drop 11%, but sales have been gaining momentum in recent weeks. Analysts had been calling for a revenue decline of 8.9%, according to a poll compiled by Refinitiv.

"You could assume that returns, which typically are higher in January, played a role in driving traffic toward the end of the quarter," Gass said in a phone interview. Kohl's accepts Amazon returns at its more than 1,100 locations, the majority of which are located off-mall.

The department store chain, meantime, said it expects fourth-quarter earnings per share to be in the range of $1.00 to $1.05, before considering any impact from tax planning strategies. Analysts had been calling for earnings of 70 cents per share, on an adjusted basis.

Kohl's shares were up more than 5% on Thursday afternoon.

With more shoppers visiting Kohl's website during the Covid pandemic, Gass said digital sales represented more than 40% of net sales during the period, up more than 20% year over year.

"Our fourth-quarter performance exceeded our expectations across all key metrics with sales strengthening as we moved through the period," she said in a statement, adding that the company managed expenses more tightly, helping it to strengthen its financial position heading into the new year.

"As we carry this momentum into 2021, we are confident that our key strategic initiatives will accelerate," Gass said, highlighting Kohl's upcoming fall launch with Sephora, and the bet that the partnership will drive more shoppers to its stores.

Gass said activewear, home goods and beauty continue to be among the retailer's top performing categories.

"Kohl's is extremely well positioned as we head into the coming year," she said. "There has been a lot of disruption in the industry, and we are going to benefit from that."

As of Wednesday's market close, Kohl's shares are up more than 8% over the past 12 months. Kohl's has a market cap of $7.35 billion, which has grown to be greater than that of Nordstrom and Macy's.

Kohl's is set to report fourth-quarter results on March 2.

Find the full press release from Kohl's here.

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