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Kohl's Q2 Earnings Preview: Rebound Quarter in Store?

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The Zacks Retail and Wholesale Sector has soared over the last month, tacking on nearly 15% in value and easily outperforming the S&P 500. Still, the sector is down roughly 14% year-to-date

Below is a chart illustrating the sector’s performance vs. the S&P 500 over several timeframes.

Zacks Investment Research
Image Source: Zacks Investment Research

A big-time player in the sector, Kohl’s (KSS - Free Report) is on deck to reveal Q2 earnings on Thursday, August 18th, before market open.

Kohl’s is a department store chain that operates specialty department stores and an e-commerce site in the U.S, offering a vast selection of products.

In addition, the company carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of a C. How does the big-box retailer shape up heading into the quarterly print? Let’s take a closer look.

Share Performance & Valuation

Kohl’s shares have mightily struggled in 2022, losing nearly a third in value and vastly underperforming the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

Over the past month, however, KSS shares have tacked on a stellar 18% in value, crushing the S&P 500’s sizable return of 12.5%.

Zacks Investment Research
Image Source: Zacks Investment Research

Kohl’s forward price-to-sales ratio resides at a tiny 0.2X, well below its five-year median of 0.4X and representing a steep 84% discount relative to its Zacks Sector.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, the company carries a Style Score of an A for Value.

Quarterly Estimates

Analysts have been overwhelmingly bearish over the last 60 days, with six negative estimate revisions coming in. The Zacks Consensus EPS Estimate of $1.08 reflects a steep 56% year-over-year decrease in quarterly earnings.

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Image Source: Zacks Investment Research

Kohl’s top-line appears to be undergoing some turbulence as well – the Zacks Consensus Sales Estimate of $4.1 billion registers an 8.4% decrease compared to year-ago quarterly sales of $4.5 billion.

Quarterly Performance & Market Reactions

Kohl’s has exceeded bottom-line estimates in three of its last four quarters, undoubtedly a positive. However, the company’s one miss came in its latest quarter, a negative EPS surprise of 86%.

The company’s top-line results have left much to be desired as of late, with Kohl’s recording back-to-back revenue misses. Below is a chart illustrating the company’s income on a quarterly basis.

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Image Source: Zacks Investment Research

The market’s liked what it’s seen from Kohl’s, with shares moving up following two of its latest quarterly prints. However, following the company’s steep bottom-line miss in its latest quarter, shares lost roughly 9% of value.

Putting Everything Together

Kohl’s shares have tumbled year-to-date, but over the last month, shares have easily outperformed the general market.

In addition, shares trade at solid valuation levels, well below their five-year median and reflecting a steep discount relative to their sector.

Still, analysts have been bearish for the quarter, and estimates reflect a declining top and bottom-line.

Quarterly results have been mixed as of late, with the company widely missing the Zacks Consensus EPS Estimate in its latest quarter.

Heading into the print, Kohl’s (KSS - Free Report) carries a Zacks Rank #5 (Strong Sell) with an Earnings ESP Score of 8.4%.


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