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Kohl's (KSS) Queues for Q3 Earnings: What Awaits the Stock?
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Kohl's Corporation (KSS - Free Report) is likely to register top-and-bottom-line declines when it reports third-quarter fiscal 2023 earnings on Nov 21. The Zacks Consensus Estimate for revenues is pegged at $4.1 billion, suggesting a decrease of 4.1% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has declined by a penny in the past seven days to 34 cents per share. This indicates a drop of 58.5% from the year-ago quarter’s reported figure. KSS has a trailing four-quarter negative earnings surprise of 23.6%, on average.
Factors to Note
Kohl's digital sales remained under pressure in the last reported quarter, declining 17% year over year. Management highlighted that it was seeing customers return to stores and sales being affected due to the elimination of online-only promotions. For fiscal 2023, the company expects a net sales decline of 2-4%, which raises concerns for the quarter to be reported.
Kohl's Corporation Price, Consensus and EPS Surprise
However, Kohl’s has been benefiting from its key priorities, including improving customer experience, simplifying value strategies, undertaking disciplined inventory and expenses management and solidifying the balance sheet. The company has been focused on driving growth in gifting, Sephora, impulse, home decor and longer-term new stores to enhance customer experience. Its omnichannel strategies and prudent partnerships like that with Amazon have also been working well.
Moreover, Kohl’s early holiday savings event — Deal Dash (a three-day event that started on Oct 9 across more than Kohl’s 1,100 stores and online on Kohls.com) — is likely to contribute to its third-quarter results.
That said, Kohl’s has been battling product cost inflation, which is marring its margins. In the second quarter of fiscal 2023, Kohl's gross margin contracted 61 basis points (bps) year over year to 39%. Increased SG&A costs continue to hamper its performance. Management expects fiscal third-quarter SG&A expenses to increase nearly 3% due to additional store-related investments and 45 Sephora small shop openings.
Our model suggests a 3.1% increase in SG&A expenses for the third quarter, while as a percentage of total revenues, we foresee a 260-basis point jump in the metric.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Kohl's this time. 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, which is not the case here.
Kohl's carries a Zacks Rank #3 and has an Earnings ESP of -6.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank #2. The company is likely to register top-and-bottom-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $57.7 billion, indicating a rise of nearly 6% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Costco’s quarterly EPS of $3.43 suggests an increase of 10.7% from the year-ago quarter’s levels. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
Ross Stores (ROST - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #2. The company is slated to witness top-and-bottom-line growth when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for ROST’s quarterly revenues is pegged at $4.8 billion, which suggests growth of about 6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ross Stores’ quarterly EPS has risen by a penny in the past seven days to $1.22, which suggests an increase of 22% from the year-ago quarter’s level. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +0.64% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.3 billion, suggesting growth of 13.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Burlington Stores’ quarterly earnings has decreased by around 2% in the past seven days to 99 cents per share, which indicates a 130.2% jump from the year-ago quarter's reported number. BURL delivered an earnings surprise of 5.3%, on average, in the trailing four quarters.
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Kohl's (KSS) Queues for Q3 Earnings: What Awaits the Stock?
Kohl's Corporation (KSS - Free Report) is likely to register top-and-bottom-line declines when it reports third-quarter fiscal 2023 earnings on Nov 21. The Zacks Consensus Estimate for revenues is pegged at $4.1 billion, suggesting a decrease of 4.1% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has declined by a penny in the past seven days to 34 cents per share. This indicates a drop of 58.5% from the year-ago quarter’s reported figure. KSS has a trailing four-quarter negative earnings surprise of 23.6%, on average.
Factors to Note
Kohl's digital sales remained under pressure in the last reported quarter, declining 17% year over year. Management highlighted that it was seeing customers return to stores and sales being affected due to the elimination of online-only promotions. For fiscal 2023, the company expects a net sales decline of 2-4%, which raises concerns for the quarter to be reported.
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation price-consensus-eps-surprise-chart | Kohl's Corporation Quote
However, Kohl’s has been benefiting from its key priorities, including improving customer experience, simplifying value strategies, undertaking disciplined inventory and expenses management and solidifying the balance sheet. The company has been focused on driving growth in gifting, Sephora, impulse, home decor and longer-term new stores to enhance customer experience. Its omnichannel strategies and prudent partnerships like that with Amazon have also been working well.
Moreover, Kohl’s early holiday savings event — Deal Dash (a three-day event that started on Oct 9 across more than Kohl’s 1,100 stores and online on Kohls.com) — is likely to contribute to its third-quarter results.
That said, Kohl’s has been battling product cost inflation, which is marring its margins. In the second quarter of fiscal 2023, Kohl's gross margin contracted 61 basis points (bps) year over year to 39%. Increased SG&A costs continue to hamper its performance. Management expects fiscal third-quarter SG&A expenses to increase nearly 3% due to additional store-related investments and 45 Sephora small shop openings.
Our model suggests a 3.1% increase in SG&A expenses for the third quarter, while as a percentage of total revenues, we foresee a 260-basis point jump in the metric.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Kohl's this time. 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, which is not the case here.
Kohl's carries a Zacks Rank #3 and has an Earnings ESP of -6.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank #2. The company is likely to register top-and-bottom-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $57.7 billion, indicating a rise of nearly 6% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Costco’s quarterly EPS of $3.43 suggests an increase of 10.7% from the year-ago quarter’s levels. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
Ross Stores (ROST - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #2. The company is slated to witness top-and-bottom-line growth when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for ROST’s quarterly revenues is pegged at $4.8 billion, which suggests growth of about 6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ross Stores’ quarterly EPS has risen by a penny in the past seven days to $1.22, which suggests an increase of 22% from the year-ago quarter’s level. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +0.64% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.3 billion, suggesting growth of 13.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Burlington Stores’ quarterly earnings has decreased by around 2% in the past seven days to 99 cents per share, which indicates a 130.2% jump from the year-ago quarter's reported number. BURL delivered an earnings surprise of 5.3%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.