Kohl's Comps Climb in January

Same-store sales at Kohl’s Corporation (KSS - Analyst Report) rebounded from December’s downfall as it  went up 0.6% in the four-week period ended January 28, 2012. However, same store growth was slower in January compared with an increase of 1.4% in the year-ago period. Nonetheless, on a year-to-date basis, same-store sales increased 0.5% in January 2012.

Strong management measures helped the company achieve the expected sales in the month. On the other hand, same-store sales at Kohl’s upscale competitor, Ross Stores Inc. (ROST - Snapshot Report), for the four weeks ended January 28, 2012, grew 5% compared with a rise of 3% and 8% recorded for the same period in 2010 and 2009, respectively.

In 2011, the company reportedly reached its goal of achieving $1 billion in e-commerce sales. It recently announced plans to build a fourth e-commerce distribution center in Texas.

Total sales of Kohl’s climbed 2.4% to $844 million for the five-week period ended January 28, 2012, compared with an increase of 3.4% in the same period a year ago. Further, on a year-to-date basis, total sales increased 2.2% to $18,804 million, compared with $18,391 million in the prior year period.

On the basis of January comparable sales, Kohl’s has increased its fourth quarter diluted earnings per share guidance from $1.70 - $1.73 to $1.79 - $1.80 and its fiscal 2011 guidance from $4.20 - $4.23 per diluted share to $4.29 - $4.30 per diluted share.

While the Northeast region was the strongest region in the month, the mid-Atlantic and Southeast as well as the Midwest region did not perform as per expectations. The South Central and Southwest regions reported mid- to high-single-digit decline.

E-commerce, Accessories and handbags, as well Men's and home performed decently during the month. Basics category was the strongest men's category with an increase in the low teens. Men's casual pants, dress shirts and young men's were also positive. However, Children's and footwear underperformed the company average.

Kohl’s will report earnings for the fourth quarter of 2011 on Thursday, February 23 at 7:00 a.m. Eastern time.

Kohl’s, which operates 1,127 stores in 49 states, holds a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating. Currently, we maintain a long-term Neutral recommendation on the stock.

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