Kohls Corp (NYSE:KSS) stock fell 2.09% (As on August 24, 11:47:52 AM UTC-4, Source: Google Finance) after the company beat estimates for quarterly profit on Wednesday, as leaner inventories, lower costs and fewer discounts helped the department store chain counter a broader retail slowdown. The comparable sales fell by a steeper-than-expected 5% compared to analysts’ estimate of a 4.43% fall, according to Refinitiv IBES data. Inventory declined 14% during the quarter as Kohl’s undertook stock clearance, leading to a 61 basis points drop in gross margin. Gross margin as a percentage of net sales was 39.0%. The company is in the midst of a turnaround under the watch of new Tom Kingsbury, who has made leaner inventories and targeted discounts his top priority after taking over the Kohl’s reins in February. Many of the strategic efforts are just underway, and the company expects to contribute incrementally in the back half of the year.
KSS in the second quarter of FY 23 has reported the adjusted earnings per share of 52 cents, beating the analysts’ estimates for the adjusted earnings per share of 22 cents. The company had reported 4.8 percent decline in the adjusted revenue growth to $3.9 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $3.74 billion. The company has reported net income of $58 million for the quarter, compared to net income of $143 million, in the prior year. Selling, general & administrative (SG&A) expenses increased 1.6% year-over-year, to $1.3 billion. As a percentage of total revenue, SG&A expenses were 33.5%, an increase of 208 basis points year-over-year. Operating income was $163 million compared to $266 million in the prior year. As a percentage of total revenue, operating income was 4.2%, a decrease of 233 basis points year-over-year. The company has generated operating cash flow of $430 million
Additionally, the company has declared a quarterly cash dividend on the Company’s common stock of $0.50 per share. The dividend is payable September 20, 2023 to shareholders of record at the close of business on September 6, 2023.
The retailer maintained its forecast for per-share earnings of $2.10 to $2.70 and a drop in net sales of 2% to 4% for fiscal 2023. For the full year 2023, the Company expects Operating margin to be approximately 4.0% and Capital Expenditures to be in the range of $600 million to $650 million, including expansion of its Sephora partnership and store refresh activity.