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Kohl's (KSS) Benefits From Solid Home Unit & Partnerships
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Kohl’s Corporation (KSS - Free Report) is focused on building its home business, which represents a solid growth opportunity. The specialty department stores retailer is progressing with its key priorities, including improving customer experience, among others. The company undertakes solid partnerships to enhance its portfolio. However, a pressured online business is a concern.
Let’s delve deeper.
Growing Home Category
Kohl’s is on track to augment its home category, which has been doing well for a while. The company aims to offer customers an expanded range of stylish home and seasonal decorations at affordable prices. Kohl’s has been actively engaged in enhancing and diversifying its home products lineup in the past year and is optimistic about the initial response to its home decor collection. The company’s improved its in-store and digital presentation, engaging in multi-channel marketing efforts like digital activations aimed at inspiring and engaging customers. Management expects to witness an increase in home sales on the back of rising awareness of the expanded assortment during 2024.
Image Source: Zacks Investment Research
Focus on Key Priorities
Kohl's is on track with its key priorities, including improving customer experience, simplifying value strategies, undertaking disciplined inventory and expenses management and solidifying the balance sheet. Keeping along these lines, the company is committed to driving growth with its loyalty programs, including Kohl's Cash, Kohl's Rewards and private-label credit cards. In the second quarter of fiscal 2023, management launched a co-brand credit card, which gives consumers more ways to earn Kohl's Rewards. KSS is on track with managing costs, focusing on lowering the marketing spend ratio and bringing more extraordinary technology into its operations to enhance productivity.
Partnerships: Key Driver
The Zacks Rank #3 (Hold) company’s solid partnership with Sephora to create a new era of elevated Beauty at Kohl's is noteworthy and generating impressive results. In the fourth quarter of fiscal 2023, Sephora sales surged more than 70%, with comparable sales growth of almost 25%. Sephora is present at 910 Kohl’s stores. Management is on track to expand the number of locations, with Sephora opening nearly 140 smaller format shops in 2024.
Kohl’s recently partnered with the owner of the Babies“R” Us brand to expand its presence in the baby category. The partnership will bring baby gear, furniture and activities, among others, to Kohl’s. Management plans to open Babies R Us shops in almost 200 Kohl's stores by 2024-fall.
Online Pressure
Kohl's has been witnessing pressure in its online business for a while. The trend continued in the fourth quarter of fiscal 2023, with digital sales (excluding the 53rd week) declining 16.5%. The company’s quarterly revenues came in at $5,956 million, down from the prior-year quarter’s level of $6,019 million. Net sales inched down 1.1% to $5,710 million, while comparable sales declined 4.3%.
The upsides mentioned above are likely to keep Kohl's growth story going. KSS’ stock has increased 35.5% in the past six months compared with the industry’s growth of 52.1%.
Top 3 Retail Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Gap (GPS - Free Report) and American Eagle Outfitters (AEO - Free Report) .
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial year sales indicates growth of 5.6% year over year. ANF delivered an earnings surprise of almost 715.6% in the last reported quarter.
Gap, a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 180.9%, on average.
The Zacks Consensus Estimate for Gap’s current financial year earnings indicates a drop of 0.3% year over year.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently sports a Zacks Rank #1. AEO delivered a trailing four-quarter average earnings surprise of 22.7%.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial year sales and earnings suggests growth of 3.3% and 12.5%, respectively, from the year-ago period’s levels.
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Kohl's (KSS) Benefits From Solid Home Unit & Partnerships
Kohl’s Corporation (KSS - Free Report) is focused on building its home business, which represents a solid growth opportunity. The specialty department stores retailer is progressing with its key priorities, including improving customer experience, among others. The company undertakes solid partnerships to enhance its portfolio. However, a pressured online business is a concern.
Let’s delve deeper.
Growing Home Category
Kohl’s is on track to augment its home category, which has been doing well for a while. The company aims to offer customers an expanded range of stylish home and seasonal decorations at affordable prices. Kohl’s has been actively engaged in enhancing and diversifying its home products lineup in the past year and is optimistic about the initial response to its home decor collection. The company’s improved its in-store and digital presentation, engaging in multi-channel marketing efforts like digital activations aimed at inspiring and engaging customers. Management expects to witness an increase in home sales on the back of rising awareness of the expanded assortment during 2024.
Image Source: Zacks Investment Research
Focus on Key Priorities
Kohl's is on track with its key priorities, including improving customer experience, simplifying value strategies, undertaking disciplined inventory and expenses management and solidifying the balance sheet. Keeping along these lines, the company is committed to driving growth with its loyalty programs, including Kohl's Cash, Kohl's Rewards and private-label credit cards. In the second quarter of fiscal 2023, management launched a co-brand credit card, which gives consumers more ways to earn Kohl's Rewards. KSS is on track with managing costs, focusing on lowering the marketing spend ratio and bringing more extraordinary technology into its operations to enhance productivity.
Partnerships: Key Driver
The Zacks Rank #3 (Hold) company’s solid partnership with Sephora to create a new era of elevated Beauty at Kohl's is noteworthy and generating impressive results. In the fourth quarter of fiscal 2023, Sephora sales surged more than 70%, with comparable sales growth of almost 25%. Sephora is present at 910 Kohl’s stores. Management is on track to expand the number of locations, with Sephora opening nearly 140 smaller format shops in 2024.
Kohl’s recently partnered with the owner of the Babies“R” Us brand to expand its presence in the baby category. The partnership will bring baby gear, furniture and activities, among others, to Kohl’s. Management plans to open Babies R Us shops in almost 200 Kohl's stores by 2024-fall.
Online Pressure
Kohl's has been witnessing pressure in its online business for a while. The trend continued in the fourth quarter of fiscal 2023, with digital sales (excluding the 53rd week) declining 16.5%. The company’s quarterly revenues came in at $5,956 million, down from the prior-year quarter’s level of $6,019 million. Net sales inched down 1.1% to $5,710 million, while comparable sales declined 4.3%.
The upsides mentioned above are likely to keep Kohl's growth story going. KSS’ stock has increased 35.5% in the past six months compared with the industry’s growth of 52.1%.
Top 3 Retail Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Gap (GPS - Free Report) and American Eagle Outfitters (AEO - Free Report) .
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial year sales indicates growth of 5.6% year over year. ANF delivered an earnings surprise of almost 715.6% in the last reported quarter.
Gap, a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 180.9%, on average.
The Zacks Consensus Estimate for Gap’s current financial year earnings indicates a drop of 0.3% year over year.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently sports a Zacks Rank #1. AEO delivered a trailing four-quarter average earnings surprise of 22.7%.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial year sales and earnings suggests growth of 3.3% and 12.5%, respectively, from the year-ago period’s levels.