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Here's How Kohl's (KSS) is Positioned Ahead of Q1 Earnings

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Kohl's Corporation (KSS - Free Report) is slated to release first-quarter fiscal 2020 results on May 19. The department store chain has a trailing four-quarter negative earnings surprise of 3.5%, on average.

The Zacks Consensus Estimate for first-quarter bottom line has deteriorated from a loss of $1.14 per share to a loss of $1.59 over the last 30 days. Moreover, the metric suggests a significant decline from the year-ago quarter’s earnings of 61 cents. Further, the consensus mark for revenues is pegged at $2.62 billion, which indicates a fall of 35.9% from the figure reported in the year-ago quarter.

Kohls Corporation Price and EPS Surprise

 

Kohls Corporation Price and EPS Surprise

Kohls Corporation price-eps-surprise | Kohls Corporation Quote


Key Factors to Note

Owing to the coronavirus outbreak, Kohl’s had shut down all its stores — more than 1,100 — effective Mar 19.We believe that COVID-19 and its resultant store closures have most likely marred performance in the fiscal first quarter. In a recent press release, management highlighted that the company will support store employees with two calendar weeks of pay.

Apart from the coronavirus-led worries, Kohl’s has been witnessing rising selling, general and administrative expenses for a while now. Incidentally, the metric had expanded by 70 basis points in the fiscal fourth quarter. Moreover, weakness in women’s category, accountable to softness in women's classic and contemporary sportswear businesses is a concern.

Nevertheless, Kohl’s has been making business adjustments like increasing focus on e-commerce. Apart from this, Kohl’s prudent moves to strengthen inventory position, gains from the Amazon returns program and product launches bode well.

What the Zacks Model Unveils

Our proven model doesn’t predict an earnings beat for Kohl’s this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Kohl’s carries a Zacks Rank #3 and an Earnings ESP of -41.69%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Lowes Companies (LOW - Free Report) has an Earnings ESP of +4.06% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General Corporation (DG - Free Report) has an Earnings ESP of +1.25% and a Zacks Rank #3.

Macys (M - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank #3.

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