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Kohl Stock Slips on Q3 Earnings & Sales Miss, Lowered Outlook
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Kohl's Corporation (KSS - Free Report) shares tumbled as much as 18.5% in the pre-marketing session as the company posted dismal third-quarter fiscal 2024 results and lowered its full-year outlook. The company’s top and bottom lines decreased year over year and missed the Zacks Consensus Estimate.
Kohl's posted earnings of 20 cents per share, down from earnings of 53 cents posted in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 27 cents per share.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total revenues came in at $3,710 million, down from the prior-year quarter’s level of $4,054 million. Net sales fell 8.8% year over year to $3,507 million. The top line missed the Zacks Consensus Estimate, which was pegged at $3,837.5 million. Comparable sales declined 9.3% year over year.
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's third-quarter results fell short of expectations, with sales remaining weak in the apparel and footwear sectors. While the company saw strong performance in key growth areas such as Sephora, home decor, gifting and impulse categories, as well as the opening of Babies "R" Us shops in 200 locations, these gains were not enough to offset declines in core business segments. As a result, Kohl's is adopting a more conservative financial outlook for the year, reflecting the third-quarter underperformance and expectations for a highly competitive holiday season.
Kohl’s Quarterly Margin Highlights
Kohl's gross margin expanded 20 basis points (bps) to 39.1% in the reported quarter. SG&A expenses dropped 5.1% to $1,291 million. As a percentage of total revenues, SG&A increased 125 basis points (bps) to 34.8%.
KSS posted an operating income of $98 million, down from $157 million in the year-ago period. The operating income margin contracted by 120 bps to 2.7%.
KSS’ Financial Health Snapshot & Other Updates
The Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $174 million and shareholders’ equity of $3,804 million. The company provided an operating cash flow of $52 million for the nine months ending Nov. 2, 2024.
Management expects capital expenditures of nearly $500 million for 2024 (including the expansion of its Sephora collaboration and store-related investments).
On Nov. 13, 2024, Kohl’s declared a quarterly cash dividend of 50 cents per share, payable on Dec. 24, to its shareholders of record as of Dec. 11.
In other news, Tom Kingsbury will step down as Chief Executive Officer of Kohl's on Jan. 15, 2025, with Ashley Buchanan appointed as his successor.
Image Source: Zacks Investment Research
What to Expect From KSS in Fiscal 2024?
For fiscal 2024, Kohl's forecasts a net sales decline of 7-8%, a revision from the previous expectation of a 4-6% decline. Comparable sales are projected to move down 6-7% compared with the earlier forecast of a 3-5% decline. The operating margin is expected to range from 3% to 3.2% compared with the prior estimate of 3.4-3.8%. Management anticipates earnings per share to be between $1.20 and $1.50, revising the earlier forecast of $1.75 to $2.25.
Shares of the company have declined 6.4% in the past three months against the industry’s growth of 13.4%.
Stocks Looking Red Hot
Deckers (DECK - Free Report) , a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). DECK delivered an average earnings surprise of 41.1% in the trailing four quarters.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 13.6% and 12.6%, respectively, from the year-ago reported figures.
Dillard's, Inc. (DDS - Free Report) , a department store retailer, presently sports a Zacks Rank #1. DDS has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests a dip of 5.1% from the year-ago reported figure.
Urban Outfitters Inc. (URBN - Free Report) is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. It currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Urban Outfitters’ current financial year sales and earnings indicates advancements of 5.8% and 12.3%, respectively, from the prior-year figures. URBN has a trailing four-quarter average earnings surprise of 17.6%.
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Kohl Stock Slips on Q3 Earnings & Sales Miss, Lowered Outlook
Kohl's Corporation (KSS - Free Report) shares tumbled as much as 18.5% in the pre-marketing session as the company posted dismal third-quarter fiscal 2024 results and lowered its full-year outlook. The company’s top and bottom lines decreased year over year and missed the Zacks Consensus Estimate.
Kohl's posted earnings of 20 cents per share, down from earnings of 53 cents posted in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 27 cents per share.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total revenues came in at $3,710 million, down from the prior-year quarter’s level of $4,054 million. Net sales fell 8.8% year over year to $3,507 million. The top line missed the Zacks Consensus Estimate, which was pegged at $3,837.5 million. Comparable sales declined 9.3% year over year.
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation price-consensus-eps-surprise-chart | Kohl's Corporation Quote
Kohl's third-quarter results fell short of expectations, with sales remaining weak in the apparel and footwear sectors. While the company saw strong performance in key growth areas such as Sephora, home decor, gifting and impulse categories, as well as the opening of Babies "R" Us shops in 200 locations, these gains were not enough to offset declines in core business segments. As a result, Kohl's is adopting a more conservative financial outlook for the year, reflecting the third-quarter underperformance and expectations for a highly competitive holiday season.
Kohl’s Quarterly Margin Highlights
Kohl's gross margin expanded 20 basis points (bps) to 39.1% in the reported quarter. SG&A expenses dropped 5.1% to $1,291 million. As a percentage of total revenues, SG&A increased 125 basis points (bps) to 34.8%.
KSS posted an operating income of $98 million, down from $157 million in the year-ago period. The operating income margin contracted by 120 bps to 2.7%.
KSS’ Financial Health Snapshot & Other Updates
The Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $174 million and shareholders’ equity of $3,804 million. The company provided an operating cash flow of $52 million for the nine months ending Nov. 2, 2024.
Management expects capital expenditures of nearly $500 million for 2024 (including the expansion of its Sephora collaboration and store-related investments).
On Nov. 13, 2024, Kohl’s declared a quarterly cash dividend of 50 cents per share, payable on Dec. 24, to its shareholders of record as of Dec. 11.
In other news, Tom Kingsbury will step down as Chief Executive Officer of Kohl's on Jan. 15, 2025, with Ashley Buchanan appointed as his successor.
Image Source: Zacks Investment Research
What to Expect From KSS in Fiscal 2024?
For fiscal 2024, Kohl's forecasts a net sales decline of 7-8%, a revision from the previous expectation of a 4-6% decline. Comparable sales are projected to move down 6-7% compared with the earlier forecast of a 3-5% decline. The operating margin is expected to range from 3% to 3.2% compared with the prior estimate of 3.4-3.8%. Management anticipates earnings per share to be between $1.20 and $1.50, revising the earlier forecast of $1.75 to $2.25.
Shares of the company have declined 6.4% in the past three months against the industry’s growth of 13.4%.
Stocks Looking Red Hot
Deckers (DECK - Free Report) , a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). DECK delivered an average earnings surprise of 41.1% in the trailing four quarters.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 13.6% and 12.6%, respectively, from the year-ago reported figures.
Dillard's, Inc. (DDS - Free Report) , a department store retailer, presently sports a Zacks Rank #1. DDS has a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests a dip of 5.1% from the year-ago reported figure.
Urban Outfitters Inc. (URBN - Free Report) is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. It currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Urban Outfitters’ current financial year sales and earnings indicates advancements of 5.8% and 12.3%, respectively, from the prior-year figures. URBN has a trailing four-quarter average earnings surprise of 17.6%.