An uptick in shopping toward the end of October and a strong back-to-school season drove a 1 percent year-over-year rise in Q3 revenue for Kohl’s Corp., the company said.
Chairman, CEO and President Kevin Mansell said those robust sales periods helped to offset weakness in September.
“Most of our key initiatives enjoyed strong success while weakness was concentrated in seasonal businesses,” Mansell explained.
Comp sales for the Menomonee Falls, Wis.-based retailer also increased, by 1 percent, in the quarter, while net income tumbled 15 percent.
The firm’s share price has been climbing in early-morning trading — up 7 percent at press time. Market watchers had been cautious on Kohl’s and other department stores as lackluster sales and elevated inventory seemed to plague many d-stores this quarter.
Macy’s Inc. sent shock waves through the footwear-and-apparel market on Wednesday when it reported yet another quarter of slipping sales, profit and comps.
For the past year, Kohl’s has been harping on its ramped up strategic initiatives and the introduction of its loyalty program. CEO Mansell said he expects the firm’s “greatness agenda” to drive more improvements.
Net Income: Reported net income for the third quarter, ending Oct. 31, 2015, totaled $120 million, a 15 percent decline from the prior-year’s reported earnings of $142 million.
EPS: Reported earnings per diluted share were 63 cents, a 10 percent decline from the year-ago quarter, when diluted EPS were 70 cents.
Net Revenue: Net sales increased 1.2 percent, to $4.43 billion, compared with sales of $4.37 billion in the year-ago quarter.
Adjustments: Net income, excluding loss on extinguishment of debt, totaled $144 million, a 1 percent rise year-over-year (from $142 million). Diluted EPS, excluding loss on extinguishment of debt, were 75 cents — a 7 percent rise year-over-year (from 70 cents).
Hit, Miss or Beat: Market watchers polled by Yahoo Finance had predicted revenues of $4.4 billion and EPS of 69 cents.
Executive Insights: “It’s been one year since we introduced our multiyear strategic framework, which we call the Greatness Agenda, and against the generally soft macro demand backdrop in the categories we compete in, the initiatives within that plan have turned our sales results from negative to positive. We’ve now produced four consecutive quarters of positive comps since the time we introduced the plan. While we’ve changed the trend of our business, we’re well aware that we must accelerate the rate of change going forward to achieve our long-term goals.”
— Mansell during Q3 conference call
Looking Ahead: The company maintained its guidance for the fiscal year.