NEW YORK (AP) — Kohl's reported mixed results for its fiscal fourth quarter, delivering a 30% increase in profits but a 10% drop in sales.
Results handily beat Wall Street estimates. Online sales growth remained strong, up 22% for the latest quarter, and accounted for 42% of net sales.
The Menomonee Falls, Wisconsin, company also issued a per-share forecast for the current year whose top range beat analysts' expectations. It also expects solid revenue growth.
The earnings report comes out as Kohl’s is fighting back against an investor group’s efforts to take control of the department store chain’s board, arguing that it would derail its progress and momentum.
The investor group nominated nine members for Kohl’s board of directors as it looks to boost the company’s stock and its financial performance. The group owns a 9.5% stake in Kohl’s.
Kohl's has been pushing various initiatives to attract shoppers including expanding its activewear and home area. The department store's program with Amazon to accept eligible Amazon items, without a box or label, has done well. It said Tuesday the initiative has resulted in 2 million new customers in the past year of whom a third are younger.
Late last year, the department store chain announced that Sephora will replace all cosmetics areas at Kohl’s with 2,500 square foot shops, starting with 200 locations in the fall. It will expand to at least 850 stores by 2023.
Kohl's CEO Michelle Gass told The Associated Press during a phone interview on Tuesday that the chain is seeing a momentum in its business, and called the Sephora shops a “game changer." And while shopping at its stores are not yet back at a normal rate, she believes that Kohl's will recover some of that. She also noted that Kohl's will be ready when shoppers start going out more, but that casual dressing will still be important.
Kohl's earned $343 million, or $2.20 per share, for the quarter ended Jan. 30. That compares with $265 million, or $1.72 per share, in the year-ago period. Adjusted earnings was $2.22, well ahead of the $1.01 per share that analysts forecast, according to FactSet.
Sales reached $6.14 billion, down from $6.83 billion in the year-ago period. But results surpassed the $5.88 billion that analysts had expected, according to FactSet.
Kohl’s expects net sales for the current year to increase in the mid-teens percentage range. The company also forecasts that per-share range should be anywhere from $2.45 to $2.95 for the year. Analysts forecast $2.65 per share, according to FactSet.
Shares rose 50 cents to $57.49 in late morning trading.
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