Kohls Corp (NYSE:KSS) stock rose 2.93% (As on November 22, 11:24:38 AM UTC-4, Source: Google Finance) after the company lowered the top end of its annual sales forecast and said it would be aggressive with promotions in the crucial holiday season as cost-conscious shoppers spend less at its department stores. Its comparable sales fell for a seventh straight quarter, declining 5.5% compared to a fall of 3% expected by analysts. The company experienced softer-than-expected demand environment, driven by less-than-ideal weather and persistent macroeconomic pressures on the customer. Digital sales were down 16.5% and continue to be impacted in part by the decision to eliminate online-only promotions in favor of omni-channel pricing across the enterprise. Store comparable sales were down approximately 1% in Q3.

Further, total beauty sales increased more than 70% in the quarter, driving additional beauty share gains. The company saw strong demand across the entire assortment, including skin care, makeup and fragrance. During the third quarter, nearly 100 more of the stores received Sephora shops. There is now a Sephora presence in over 900 of the stores, with more than 850 large format and 50 smaller shops.

KSS in the third quarter of FY 23 has reported the adjusted earnings per share of 53 cents, beating the analysts’ estimates for the adjusted earnings per share of 35 cents. The company had reported 5.2 percent decline in the adjusted revenue to $3.84 billion in the third quarter of FY 23, missing the analysts’ estimates for revenue of $3.99 billion. Gross margin in Q3 was 38.9%, an increase of 158 basis points to last year. The year-over-year increase was driven by lower freight costs, reduced digital-related cost of shipping and further progress against simplifying the value strategies. This was partially offset by product cost inflation. The company ended the quarter with $190 million of cash and cash equivalents. Inventory at quarter end was down 13% compared to last year, exceeding the commitment of a mid-single-digit decline. Operating cash flow was $151 million in the third quarter and $379 million year-to-date.

Kohl’s now expects annual sales to fall between 2.8% and 4%, against its previous projection for a 2% to 4% drop, and analysts’ estimate for a 2.5% fall in LSEG data. However, it raised the lower end of its annual profit forecast, expecting per-share earnings between $2.30 and $2.70, up from a previous forecast of $2.10 to $2.70. This is versus the analyst consensus of $2.41.