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Kohl's (KSS) to Post Q2 Earnings: What's in the Offing?

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Kohl's Corporation (KSS - Free Report) is likely to post a declinein the top and bottom lines when it reports second-quarter fiscal 2020 numbers on Aug 18. The Zacks Consensus Estimate for second-quarter loss has narrowed by 5.8% in the past seven days to 98 cents per share. This suggests deterioration from earnings of $1.55 registered in the year-ago quarter. Notably, this department store chain has a trailing four-quarter negative earnings surprise of 21%, on average. In the last reported quarter, the company delivered a negative earnings surprise of 78.8%.

The consensus estimate for quarterly revenues is pegged at $3.05 billion, which suggests a decline of 31.2% from the prior-year quarter’s tally.

Factors to Note

Due to the coronavirus outbreak, Kohl's had temporarily closed more than 1,100 stores. While the company has been reopening stores in a phased manner as coronavirus-induced restrictions are being lifted, the temporary closure of several stores at some point in the fiscal second quarter are likely to have dented performance. Moreover, the reopened stores have been operating at restricted working hours. Apart from this, Kohl’s has been witnessing rising selling, general and administrative expenses for a while now. Incidentally, as a percentage of total revenues, SG&A expenses increased significantly year over year to 43.9% in the fiscal first quarter.

Nevertheless, the company has been benefiting from a solid online business, especially amid the pandemic. Further, management has been undertaking actions to curb expenses amid the crisis.

Kohls Corporation Price and EPS Surprise

Kohls Corporation Price and EPS Surprise

Kohls Corporation price-eps-surprise | Kohls Corporation Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Kohl's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Kohl's carries a Zacks Rank #4 (Sell) and an Earnings ESP of +24.49%.

Stocks With a Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General (DG - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK’S Sporting Goods (DKS - Free Report) has an Earnings ESP of +34.65% and a Zacks Rank #3.

Lowe’s Companies (LOW - Free Report) has an Earnings ESP of +11.01% and a Zacks Rank #3.

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