We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kohl's (KSS) Gains on Strategic Growth Efforts, Online Sales
Read MoreHide Full Article
Kohl's Corporation (KSS - Free Report) is in solid shape, courtesy of strong e-commerce business. Also, the company’sstrategic efforts to drive growth and lucrative partnerships are worth mentioning.
Let’s dive deeper.
Digital Business: A Key Driver
Kohl’s is benefiting from its growing digital business for a while now. Notably, digital revenues contributed 32% to total sales, while increasing 25% year over year during third-quarter fiscal 2020. The upside can be attributed to customers’ increased shift to online shopping amid the coronavirus outbreak. Given the need of the hour, management is speeding up its digital marketing and enhancing website to cater to customers’ needs. Certainly, the company’s investments toward boosting online capabilities and improving consumer engagement are yielding. Management expects to keep leveraging its strong online presence.
We note that the company’s solid endeavors to boost mobile traffic have augmented the adoption of the Kohl app, making it a vital constituent of online sales. To improve online offerings, Kohl’s is expanding its e-commerce fulfillment centers along with strengthening in-store pickups.
Other Growth Efforts
In October, Kohl’s introduced a new strategic framework that focuses on four key areas — driving top-line growth, expanding operating margin, implementing disciplined capital management and undertaking an agile accountable and inclusive culture. Under its driving top-line growth initiative, the company intends to become the most trusted retailer of choice for active and casual lifestyle. Also, Kohl’s is undertaking strategic efforts to create loyalty and value along with providing a differentiated omni-channel experience for customers.
Notably, Kohl’s intends to reach its operating margin goal of 7-8% with the help of modest level of growth, its ongoing transformational margin initiatives and focus on operational excellence. Further, management is committed to disciplined capital management. Also, the company’s innovative and adaptive learning approach and focus on diversity and inclusion bodes well.
Kohl’s is strengthening its ties with retail giant Amazon (AMZN - Free Report) to drive traffic. Incidentally, the company has been benefiting from the rollout of its Amazon returns program nationwide. In the long run, the company is expected to receive significant boost to its business through this partnership. Further Kohl’s partnership with Fanatics, Property Brothers and Home Decor bodes well.
Is All Rosy For Kohl’s?
Kohl’s has been seeing rising selling, general and administrative expenses, as a percentage of total revenues, for a while now. In the third quarter of fiscal 2020, the metric increased to 32.7% from 30.7% reported in the prior-year quarter. Moreover, the company’s gross margin contracted 48 basis points in the fiscal third quarter thanks to escalated shipping costs, owing to higher digital sales penetration. Going into the fiscal fourth quarter, management expects gross margin to stay under pressure owing to increased shipping costs, as it anticipates digital penetration to remain high along with incremental Sprite surcharges.
Nevertheless, we believe that the aforementioned upsides are likely to keep driving this Zacks Rank #3 (Hold) company’s performance. Notably, shares of Kohl’s have surged 56.8% in the past three months compared with the industry’s growth of 57.3%.
Kroger (KR - Free Report) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 6.2%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Kohl's (KSS) Gains on Strategic Growth Efforts, Online Sales
Kohl's Corporation (KSS - Free Report) is in solid shape, courtesy of strong e-commerce business. Also, the company’sstrategic efforts to drive growth and lucrative partnerships are worth mentioning.
Let’s dive deeper.
Digital Business: A Key Driver
Kohl’s is benefiting from its growing digital business for a while now. Notably, digital revenues contributed 32% to total sales, while increasing 25% year over year during third-quarter fiscal 2020. The upside can be attributed to customers’ increased shift to online shopping amid the coronavirus outbreak. Given the need of the hour, management is speeding up its digital marketing and enhancing website to cater to customers’ needs. Certainly, the company’s investments toward boosting online capabilities and improving consumer engagement are yielding. Management expects to keep leveraging its strong online presence.
We note that the company’s solid endeavors to boost mobile traffic have augmented the adoption of the Kohl app, making it a vital constituent of online sales. To improve online offerings, Kohl’s is expanding its e-commerce fulfillment centers along with strengthening in-store pickups.
Other Growth Efforts
In October, Kohl’s introduced a new strategic framework that focuses on four key areas — driving top-line growth, expanding operating margin, implementing disciplined capital management and undertaking an agile accountable and inclusive culture. Under its driving top-line growth initiative, the company intends to become the most trusted retailer of choice for active and casual lifestyle. Also, Kohl’s is undertaking strategic efforts to create loyalty and value along with providing a differentiated omni-channel experience for customers.
Notably, Kohl’s intends to reach its operating margin goal of 7-8% with the help of modest level of growth, its ongoing transformational margin initiatives and focus on operational excellence. Further, management is committed to disciplined capital management. Also, the company’s innovative and adaptive learning approach and focus on diversity and inclusion bodes well.
Kohl’s is strengthening its ties with retail giant Amazon (AMZN - Free Report) to drive traffic. Incidentally, the company has been benefiting from the rollout of its Amazon returns program nationwide. In the long run, the company is expected to receive significant boost to its business through this partnership. Further Kohl’s partnership with Fanatics, Property Brothers and Home Decor bodes well.
Is All Rosy For Kohl’s?
Kohl’s has been seeing rising selling, general and administrative expenses, as a percentage of total revenues, for a while now. In the third quarter of fiscal 2020, the metric increased to 32.7% from 30.7% reported in the prior-year quarter. Moreover, the company’s gross margin contracted 48 basis points in the fiscal third quarter thanks to escalated shipping costs, owing to higher digital sales penetration. Going into the fiscal fourth quarter, management expects gross margin to stay under pressure owing to increased shipping costs, as it anticipates digital penetration to remain high along with incremental Sprite surcharges.
Nevertheless, we believe that the aforementioned upsides are likely to keep driving this Zacks Rank #3 (Hold) company’s performance. Notably, shares of Kohl’s have surged 56.8% in the past three months compared with the industry’s growth of 57.3%.
Don’t Miss These Bets
Target (TGT - Free Report) , which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 8.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kroger (KR - Free Report) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 6.2%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>