Reuters

(Reuters)

Kohl's Posts Higher Profit, Boosts Forecast

By Retail FOXBusiness

Kohl’s (KSS) revealed a 20% improvement in third-quarter profit on Thursday and lifted its fiscal forecast, as new exclusive clothes deals, private labels and tighter expenses helped to improve gross margins.

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The company raised its fiscal view to a range of $4.34 to $4.49 a share, from its earlier view between $4.41 and $4.52 a share. Wall Street is looking for a fiscal 2011 profit of $4.44.

The department store operator attributed an improvement in gross margin, a measure of profitability of goods sold, to increased penetration of private and exclusive brands and disciplined inventory management. The company tightened costs, allowing it to grow expenses at a slower rate than expected.

The Menomonee Falls, Wis.-based moderately priced retailer posted net income in the third quarter of $211 million, or 80 cents a share, compared with $176 million, 57 cents a share, in the same quarter last year.

The results were ahead of average analyst estimates polled by Thomson Reuters of 79 cents.
Revenue for the three-month period was $4.4 billion, up 3.8% from$4.2 billion a year ago, matching the Street’s view.

The gains were led by the exclusive introduction of the Jennifer Lopez and Marc Anthony brands. 

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“I am extremely pleased with our ability to deliver strong net income and earnings per share growth in a challenging sales environment,” Kohl’s CEO Kevin Mansell said in a statement.

“We expect our collection of powerful brands supported by significant marketing investments, especially in broadcast and digital media, to deliver a strong Holiday season,” he said.

The stronger results come a day after the company’s board declared a quarterly cash dividend of 25 cents a share, payable on Dec. 28 to shareholders of record on Dec. 7.

Looking ahead, the company expects to deliver sales growth between 4% and 6% during the quarter, with comparable sales up 2% to 4%. Assuming those sales, earnings are forecasted to be between $1.93 and $2.04 a share, compared with the Street’s view of $1.94.

The company says it is on track to hit $1 billion in e-commerce sales in 2011.

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