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Kohl's (KSS) Expands Partnership With Sephora to Fuel Growth
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Kohl's Corporation (KSS - Free Report) is committed to strengthening ties with its strategic partners. Moving on these lines, the company announced plans to expand Sephora’s presence to all 1,100 plus Kohl’s stores. Currently, the company has Sephora at Kohl’s in nearly 600 locations throughout the country. Management highlighted that Sephora at Kohl’s continues to deliver impressive results as it makes prestige beauty easily accessible to more people in the country. The partnership is bringing a younger, new and more diverse crowd to the locations.
We note that the partnership between the two parties commenced a year ago. During 2021, management opened 200 Sephora at Kohl’s locations, which have sustained a high-single digit percent sales lift compared with the rest of the chain. Further, the roughly 400 stores opened in 2022 are witnessing a mid-single digit percent sales rise. Sephora at Kohl’s is delivering solid performance in all categories like skincare, makeup and fragrance. In addition, Sephora at Kohl’s brands are gaining on higher distribution.
Image Source: Zacks Investment Research
Kohl’s and Sephora are on track to innovate and optimize customer experiences. Management is piloting a cross-company Buy Online, Pick-Up In Store service, which helps people to purchase items on Sephora.com and pick up the order at Kohl’s stores. Continued cross-store promotions, which make Sephora savings accessible to Sephora at Kohl’s shoppers, also bodes well. Customers can buy and redeem Sephora gift cards at Kohl’s stores, irrespective of where the gift cards were bought. During the end of the year, both parties will expand the holiday gifting assortment and increasing marketing investments to drive traffic during the season.
Sephora at Kohl’s, which was introduced in 2021, is expected to grow to 850 locations by 2023. Moreover, management estimates Sephora at Kohl’s to grow to deliver $2 billion insales every year by 2025. Certainly, the introduction of Sephora at Kohl’s is in tandem with Kohl’s strategy to become the leading destination for the active and casual lifestyle.
Wrapping Up
Kohl's reported soft second-quarter fiscal 2022 results on Aug 18. During the quarter, both the top and bottom lines declined year over year. Results were hurt by a tough macroeconomic landscape, increased inflation and sluggish consumer spending. The company’s gross margin remained soft during the quarter.
The Zacks Rank #5 (Strong Buy) company also slashed its overall guidance for fiscal 2022. It now expects net sales to decline 5-6% in the fiscal year. Earlier, the net sales growth was anticipated in a range of flat to 1%.Kohl’s envisions earnings per share (EPS) in the range of $2.80-$3.20 (excluding non-recurring charges) compared with the earlier range of $7.45-$7.85 (excluding non-recurring charges).
KSS’s shares have slumped 30.5% in the past three months compared with the industry’s 1.2% decline.
The Zacks Consensus Estimate for Dollar General’s current financial year revenues and EPS suggests growth of 10% and 13.4%, respectively, from the year-ago reported figure. Dollar General has a trailing four-quarter earnings surprise of 2.8%, on average.
Costco, which is engaged in the operation of membership warehouses, carries a Zacks Rank #2. COST has an expected EPS growth rate of 9.2% for three to five years.
The Zacks Consensus Estimate for Costco’s current financial year sales and EPS suggests growth of 15.4% and 18.2%, respectively, from the year-ago period. COST has a trailing four-quarter earnings surprise of 9.7%, on average.
Dollar Tree operates discount variety retail stores. The stock currently carries a Zacks Rank #2. DLTR has an expected EPS growth rate of 15.5% for three to five years.
The Zacks Consensus Estimate for Dollar Tree’s current financial year revenues and EPS suggests growth of 6.7% and 40.7%, respectively, from the year-ago reported figure. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average.
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Kohl's (KSS) Expands Partnership With Sephora to Fuel Growth
Kohl's Corporation (KSS - Free Report) is committed to strengthening ties with its strategic partners. Moving on these lines, the company announced plans to expand Sephora’s presence to all 1,100 plus Kohl’s stores. Currently, the company has Sephora at Kohl’s in nearly 600 locations throughout the country. Management highlighted that Sephora at Kohl’s continues to deliver impressive results as it makes prestige beauty easily accessible to more people in the country. The partnership is bringing a younger, new and more diverse crowd to the locations.
We note that the partnership between the two parties commenced a year ago. During 2021, management opened 200 Sephora at Kohl’s locations, which have sustained a high-single digit percent sales lift compared with the rest of the chain. Further, the roughly 400 stores opened in 2022 are witnessing a mid-single digit percent sales rise. Sephora at Kohl’s is delivering solid performance in all categories like skincare, makeup and fragrance. In addition, Sephora at Kohl’s brands are gaining on higher distribution.
Image Source: Zacks Investment Research
Kohl’s and Sephora are on track to innovate and optimize customer experiences. Management is piloting a cross-company Buy Online, Pick-Up In Store service, which helps people to purchase items on Sephora.com and pick up the order at Kohl’s stores. Continued cross-store promotions, which make Sephora savings accessible to Sephora at Kohl’s shoppers, also bodes well. Customers can buy and redeem Sephora gift cards at Kohl’s stores, irrespective of where the gift cards were bought. During the end of the year, both parties will expand the holiday gifting assortment and increasing marketing investments to drive traffic during the season.
Sephora at Kohl’s, which was introduced in 2021, is expected to grow to 850 locations by 2023. Moreover, management estimates Sephora at Kohl’s to grow to deliver $2 billion insales every year by 2025. Certainly, the introduction of Sephora at Kohl’s is in tandem with Kohl’s strategy to become the leading destination for the active and casual lifestyle.
Wrapping Up
Kohl's reported soft second-quarter fiscal 2022 results on Aug 18. During the quarter, both the top and bottom lines declined year over year. Results were hurt by a tough macroeconomic landscape, increased inflation and sluggish consumer spending. The company’s gross margin remained soft during the quarter.
The Zacks Rank #5 (Strong Buy) company also slashed its overall guidance for fiscal 2022. It now expects net sales to decline 5-6% in the fiscal year. Earlier, the net sales growth was anticipated in a range of flat to 1%.Kohl’s envisions earnings per share (EPS) in the range of $2.80-$3.20 (excluding non-recurring charges) compared with the earlier range of $7.45-$7.85 (excluding non-recurring charges).
KSS’s shares have slumped 30.5% in the past three months compared with the industry’s 1.2% decline.
3 Top Retail Stocks
Here we have highlighted three better-ranked stocks, namely Dollar General (DG - Free Report) , Costco (COST - Free Report) and Dollar Tree (DLTR - Free Report) .
Dollar General, a discount retailer, currently carries a Zacks Rank #2 (Buy). DG has an expected EPS growth rate of 12.8% for three to five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Dollar General’s current financial year revenues and EPS suggests growth of 10% and 13.4%, respectively, from the year-ago reported figure. Dollar General has a trailing four-quarter earnings surprise of 2.8%, on average.
Costco, which is engaged in the operation of membership warehouses, carries a Zacks Rank #2. COST has an expected EPS growth rate of 9.2% for three to five years.
The Zacks Consensus Estimate for Costco’s current financial year sales and EPS suggests growth of 15.4% and 18.2%, respectively, from the year-ago period. COST has a trailing four-quarter earnings surprise of 9.7%, on average.
Dollar Tree operates discount variety retail stores. The stock currently carries a Zacks Rank #2. DLTR has an expected EPS growth rate of 15.5% for three to five years.
The Zacks Consensus Estimate for Dollar Tree’s current financial year revenues and EPS suggests growth of 6.7% and 40.7%, respectively, from the year-ago reported figure. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average.