Yahoo Finance Kohl's (KSS) Q1 Earnings Beat Estimates on Higher Comps - Analyst Blog
Retailer Kohl’s Corporation KSS delivered better-than-expected earnings in the first quarter of fiscal 2015 on the back of improved comparable store sales (comps). However, sales missed the consensus mark, probably due to weak sales performance in the month of February.
In the first quarter, Kohl’s reported earnings of 63 cents per share, which beat the Zacks Consensus Estimate of 57 by 10.5%. Earnings also improved by 5% from the prior-year quarter driven by higher sales, comps growth and prudent management of expenses.
Kohl's Corporation - Quarterly EPS | FindTheCompany
Sales and Margins
Net sales of $4.123 billion missed the Zacks Consensus Estimate of $4.182 billion by 1.4% but increased 1.3% from the year-ago level owing to an increase in comps. Sales were sluggish in February but accelerated in the months of March and April.
Comps increased 1.4% in the first quarter, driven by Kohl’s continuous efforts to improve its base business and its focus on the strategic initiative, Greatness Agenda, which focuses on increasing transactions per store and thus traffic. However, comps growth in the quarter was lower than the preceding quarter’s growth of 3.7%.
Gross margin expanded 17 basis points (bps) to 36.9%, while operating margin contracted 10 bps to 6.8%.
Store Update
At the end of the quarter, Kohl’s operated 1,164 stores in 49 states. The company opened two new stores in the quarter.
Other Financial Details
As of May 2, 2015, Kohl’s held $1.19 billion of cash and cash equivalents compared with $1.41 billion as of Jan 31, 2015. The company ended the quarter with long-term debt of $2.79 billion, flat sequentially.
During the quarter, Kohl's board announced its quarterly dividend of 45 cents per share, which will be paid on Jun 24 to shareholders as of Jun 10.
Fiscal 2015 Guidance
Kohl’s did not provide an update on its guidance for fiscal 2015. However, in the preceding quarter, it stated that it expects fiscal 2015 earnings per share in the range of $4.40–$4.60, higher than the prior-year earnings of $4.24. The Zacks Consensus Estimate for fiscal 2015 is pegged at $4.56 per share. From flat revenues seen in the last fiscal, the company expects sales to increase 1.8% to 2.8% in fiscal 2015, driven by comps growth of 1.5%–2.5%.
Kohl’s has a Zacks Rank #2 (Buy). Other companies worth considering in the retail sector include Ingles Market, Inc. IMKTA, The Fresh Market, Inc. TFM and J.C. Penny Company JCP. All of them hold a Zacks Rank #2 (Buy).
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