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Why Should You Dump Kohl's Corp (KSS) from Your Portfolio?
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If you still have shares of Kohl’s Corporation (KSS - Free Report) in your portfolio, it is time you dump them as chances of favorable returns in the near term are bleak.
This is because the stock registered a negative return of 13.2% in the last one year, underperforming the Zacks categorized Retail-Wholesale sector's gain of 8.2%.
Let’s delve deeper and find out what is taking this Zacks Rank #5 (Strong Sell) company down.
Why Kohl’s Should be Avoided
Analysts have become increasingly bearish on the stock over the past couple of months with estimates moving south. With no upward revision in the last 60 days, the Zacks Consensus Estimate for current-quarter earnings declined from 36 cents to 28 cents per share. Similarly for fiscal 2017, the Zacks Consensus Estimate declined from $3.82 per share to $3.600, in the said time frame.
Despite posting better-than-expected earnings and in-line revenues, both the figures declined year-over-year owing to a challenging sales environment and lower comparable store sales (comps). Comps dropped 2.2% in the fourth quarter, wider than the preceding quarter’s decline of 1.7%. This signals that the company’s strategic initiative Greatness Agenda, which was designed to increase transactions per store and sales, is failing to deliver results. Though the plan has helped the company to deliver positive comps in all the four quarters of fiscal 2015, the quarterly growth rates improved gradually thus posing a concern. Moreover, comps declined in all the four quarters of fiscal 2016.
We note that Kohl’s has been grappling with numerous headwinds since the past many quarters due to difficult sales environment and cautious consumer spending. Change in spending patterns of consumers is also hurting sales. Demand for clothes and accessories like watches and handbags have declined as consumers prefer to spend more on home renovations and cars. This has affected the store traffic significantly. Further, competition from discount retailers is hurting sales at department stores. Notably, US department stores including Kohl’s have been struggling to gain market share in the face of increased competition by online rivals including Amazon.com Inc. (AMZN - Free Report) .
Kohl's Corporation Price, Consensus and EPS Surprise
Investors interested in the broader retail space may consider better-ranked stocks like Foot Locker, Inc. (FL - Free Report) and The Children's Place, Inc. (PLCE - Free Report) . While Children’s Place sports a Zacks Rank #1 (Strong Buy) and has long-term earnings growth of 8.00%, Foot Locker carrying a Zacks Rank #2 (Buy), has growth rate of 9.71%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
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In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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Why Should You Dump Kohl's Corp (KSS) from Your Portfolio?
If you still have shares of Kohl’s Corporation (KSS - Free Report) in your portfolio, it is time you dump them as chances of favorable returns in the near term are bleak.
This is because the stock registered a negative return of 13.2% in the last one year, underperforming the Zacks categorized Retail-Wholesale sector's gain of 8.2%.
Let’s delve deeper and find out what is taking this Zacks Rank #5 (Strong Sell) company down.
Why Kohl’s Should be Avoided
Analysts have become increasingly bearish on the stock over the past couple of months with estimates moving south. With no upward revision in the last 60 days, the Zacks Consensus Estimate for current-quarter earnings declined from 36 cents to 28 cents per share. Similarly for fiscal 2017, the Zacks Consensus Estimate declined from $3.82 per share to $3.600, in the said time frame.
Despite posting better-than-expected earnings and in-line revenues, both the figures declined year-over-year owing to a challenging sales environment and lower comparable store sales (comps). Comps dropped 2.2% in the fourth quarter, wider than the preceding quarter’s decline of 1.7%. This signals that the company’s strategic initiative Greatness Agenda, which was designed to increase transactions per store and sales, is failing to deliver results. Though the plan has helped the company to deliver positive comps in all the four quarters of fiscal 2015, the quarterly growth rates improved gradually thus posing a concern. Moreover, comps declined in all the four quarters of fiscal 2016.
We note that Kohl’s has been grappling with numerous headwinds since the past many quarters due to difficult sales environment and cautious consumer spending. Change in spending patterns of consumers is also hurting sales. Demand for clothes and accessories like watches and handbags have declined as consumers prefer to spend more on home renovations and cars. This has affected the store traffic significantly. Further, competition from discount retailers is hurting sales at department stores. Notably, US department stores including Kohl’s have been struggling to gain market share in the face of increased competition by online rivals including Amazon.com Inc. (AMZN - Free Report) .
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation Price, Consensus and EPS Surprise | Kohl's Corporation Quote
Stocks to Consider
Investors interested in the broader retail space may consider better-ranked stocks like Foot Locker, Inc. (FL - Free Report) and The Children's Place, Inc. (PLCE - Free Report) . While Children’s Place sports a Zacks Rank #1 (Strong Buy) and has long-term earnings growth of 8.00%, Foot Locker carrying a Zacks Rank #2 (Buy), has growth rate of 9.71%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>