Kohl's Corp
The company reported a net sales decline of 4.2% Y/Y to $3.525 billion, with comparable sales for the quarter decreasing 5.1% Y/Y. Total revenue stood at $3.732 billion. The analyst consensus estimate was $3.583 billion.
Gross margin for the quarter expanded by 59 basis points to 39.6%. Operating income for the quarter was $166 million versus $163 million last year. The operating margin expanded 26 basis points Y/Y to 4.4%.
Selling, general and administrative expenses decreased 4.2% Y/Y to $1.2 billion. As a percentage of total revenue, SG&A expenses were 33.5%, an decrease of 1 basis points Y/Y. EPS was $0.59, beating the analyst consensus estimate of $0.44.
Inventory at the end of the quarter was $3.2 billion, down 9% Y/Y. Kohl's held $231 million in cash and equivalents as of August 3. Operating cash flow was $254 million vs. $430 million in the prior year.
Dividend: On August 13, 2024, Kohl's Board of Directors declared a quarterly cash dividend of $0.50 per share, payable on September 25, to shareholders of record as of September 11.
Outlook: Kohl's raised the outlook for FY24 EPS to $1.75 - $2.25 (from $1.25 - $1.85) versus the Street view of $1.56.Kohl's revised FY24 sales growth outlook to a decline of (4%) - (6%) from a decline of (2%) - (4%). The company now sees FY24 comparable sales decline of (3%) to (5%) vs. (1%) - (3%) prior.
Kohl's now projects an FY24 operating margin of 3.4% - 3.8% (previous 3% - 3.5%) and continues to see capital expenditures of about $500 million, including expansion of its Sephora partnership and other store-related investments.
Tom Kingsbury, Kohl's chief executive officer, said, "During the second quarter, our customers exhibited more discretion in their spending, which pressured our sales even as customers transacted more frequently. This overshadowed strong performance in our key growth areas, including Sephora, home decor, gifting, and impulse."
"Looking ahead, we are focused on ensuring that the substantial work that we've done across product, value, and experience is fully recognized by both new and existing customers. We will also capitalize on new opportunities such as our partnership with Babies "R" Us and expect to continue to benefit from our key growth areas."
Investors can gain exposure to the stock via WBI Power Factor High Dividend ETF
Price Action: KSS shares are up 3.83% at $20.35 premarket at the last check Wednesday.
