Summer Clothing Heats Up Kohl's

Industries Reuters

Kohl's reported better-than-expected quarterly profit, helped by better control over inventories and warm weather that boosted sales of summer clothes and accessories.

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The department store chain's shares rose almost 8 percent to $40.26 in premarket trading on Thursday. Shares of rival Macy's, which also reports quarterly results on Thursday, were up 3 percent.

Shares of department store operators, which are struggling with stiff competition from online and off-price retailers, have been under pressure in the past year.

Hot weather in July, however, increased traffic in malls, helping department stores clear inventory from the previous quarter.

Sales at Kohl's stores open at least a year fell 1.8 percent, down for the second straight quarter. Analysts polled by research firm Consensus Metrix had on average forecast a 1.7 percent drop.

Kohl's net income rose to $140 million, or 77 cents per share, in the second quarter ended July 30, from $130 million, or 66 cents per share, a year earlier.

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Excluding items, the company earned $1.22 per share.

Net sales fell 2 percent to $4.18 billion.

Analysts on average had expected earnings of $1.03 per share and revenue of $4.16 billion, according to Thomson Reuters I/B/E/S.

The company said it now expects adjusted earnings of 3.80-$4.00 per share for the year ending January 2017, down from its previous forecast of $4.05 to $4.25.

 

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty)