Kohl’s Corp.’s shares are soaring today — up nearly 13 percent, to $51.34 — after the company posted third-quarter profits that were much stronger than expected.
The department store chain said its Q3 net income climbed 22 percent year-over-year, to $146 million, or 83 cents per diluted share, beating forecasts for diluted earnings per share of 70 cents.
Sales, however, declined 2.3 percent year-over-year, to $4.3 billion, but were in line with forecasts. Total comparable store sales also declined 1.7 percent in Q3
Kohl’s president and CEO Kevin Mansell said that he was pleased with the firm’s modest improvement in year-to-date comp sales trends during the quarter, boosted by a solid back-to-school performance.
“The period included a strong back-to-school selling season, with sales up 5 percent in key back-to-school categories, but that was followed by a very weak month of September selling period,” he added. “I’m happy to say we ended the quarter strongly in October and saw progressive sequential improvement throughout the month as we moved some of our key marketing to better coincide with colder weather. The month of October ended basically flat to last year, which is encouraging as we enter the holiday season.”
After a dismal 2015 holiday season, investors are likely also pleased to see Kohl’s reaffirm its full-year diluted EPS in the range of $3.12 to $3.32. The company expected adjusted diluted EPS in the range of $3.80 to $4.
Mansell noted that the firm had also made progress on its inventory reduction initiatives during the third quarter, reducing inventory per store by more than 9 percent.