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Kohl's (KSS) Up 35.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Kohl's (KSS - Free Report) . Shares have added about 35.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kohl's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Kohl's Q3 Earnings Beat Estimates, Sales Fall Y/Y
Kohl's posted third-quarter fiscal 2020 results, with the top line missing the Zacks Consensus Estimate and declining year over year. Moreover, the company’s bottom line was significantly lower than the year-ago quarter’s levels. However, the metric came ahead of the consensus mark.
The company highlighted that it saw significant improvement in sales and profit on a sequential basis in the third quarter. Moreover, online sales remained strong during the quarter. Also, management repaid its full revolver credit.
Kohl's is optimistic about its performance and strength in its omichannelcapabilities during the holiday season. Also, management plans to reinstate a dividend during the first half of 2021.
Q3 in Details
Kohl's posted adjusted earnings of 1 cent per share. The Zacks Consensus Estimate was pegged at a loss of 43 cents. However, the figure was significantly lower than adjusted earnings of 74 cents per share reported in the year-ago quarter.
Total revenues came in at $3,979 million, down 14% from the prior-year quarter’s levels. Also, the metric lagged the Zacks Consensus Estimate of $4,056.6 million. Net sales have declined 13.3% in the quarter.
Gross margin contracted 48 basis points to 35.8% in the quarter under review from 36.3% in the year-ago quarter. Notably, SG&A expenses declined 8.2% year over year to $1,302 million. However, as a percentage of total revenues, SG&A expenses increased to 32.7% in the quarter from 30.7% in the prior-year quarter. The company reported operating income of $22 million compared with $204 million posted in the prior-year quarter.
Other Financial Details
Kohl’s ended the quarter with cash and cash equivalents of $1,939 million, long-term debt of $2,450 million and shareholders’ equity of $4,838 million. The company generated net cash from operating activities of $910 million during nine months ended Oct 31.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 31.84% due to these changes.
VGM Scores
At this time, Kohl's has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Kohl's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Kohl's (KSS) Up 35.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Kohl's (KSS - Free Report) . Shares have added about 35.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kohl's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Kohl's Q3 Earnings Beat Estimates, Sales Fall Y/Y
Kohl's posted third-quarter fiscal 2020 results, with the top line missing the Zacks Consensus Estimate and declining year over year. Moreover, the company’s bottom line was significantly lower than the year-ago quarter’s levels. However, the metric came ahead of the consensus mark.
The company highlighted that it saw significant improvement in sales and profit on a sequential basis in the third quarter. Moreover, online sales remained strong during the quarter. Also, management repaid its full revolver credit.
Kohl's is optimistic about its performance and strength in its omichannelcapabilities during the holiday season. Also, management plans to reinstate a dividend during the first half of 2021.
Q3 in Details
Kohl's posted adjusted earnings of 1 cent per share. The Zacks Consensus Estimate was pegged at a loss of 43 cents. However, the figure was significantly lower than adjusted earnings of 74 cents per share reported in the year-ago quarter.
Total revenues came in at $3,979 million, down 14% from the prior-year quarter’s levels. Also, the metric lagged the Zacks Consensus Estimate of $4,056.6 million. Net sales have declined 13.3% in the quarter.
Gross margin contracted 48 basis points to 35.8% in the quarter under review from 36.3% in the year-ago quarter. Notably, SG&A expenses declined 8.2% year over year to $1,302 million. However, as a percentage of total revenues, SG&A expenses increased to 32.7% in the quarter from 30.7% in the prior-year quarter. The company reported operating income of $22 million compared with $204 million posted in the prior-year quarter.
Other Financial Details
Kohl’s ended the quarter with cash and cash equivalents of $1,939 million, long-term debt of $2,450 million and shareholders’ equity of $4,838 million. The company generated net cash from operating activities of $910 million during nine months ended Oct 31.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 31.84% due to these changes.
VGM Scores
At this time, Kohl's has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Kohl's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.