Department store chain Kohl's Corp reported a quarterly profit well ahead of analysts' expectations after cost cuts boosted margins, sending its shares up 7 percent in trading before the bell.
The company, which caters to price-sensitive shoppers, reported net income of $147 million, or 66 cents per share, in the quarter ended May 4, compared with $154 million, or 63 cents per share, a year earlier.
Gross margins rose to 36.4 percent from 35.9 percent a year earlier, helped by a drop in expenses.
Total sales fell 1 percent to $4.20 billion in the quarter due to a 1.9 percent drop in sales at stores open for more than a year. Colder weather in large parts of the United States hurt sales in the earlier part of the quarter.
Analysts on average had expected earnings of 56 cents per share on revenue of $4.26 billion, according to Thomson Reuters I/B/E/S.
"After a slow start, sales improved considerably in April as the weather finally improved in our most weather-sensitive regions," Kohl's Chief Executive Kevin Mansell said in a statement.
Kohl's forecast earnings of $1.00 to $1.08 per share for the current quarter on total sales growth of 1 to 3 percent. The company expects comparable-store sales growth of 0 to 2 percent.
The company's first-quarter results mirrored that of rival Macy's Inc , which reported a higher first-quarter profit on Tuesday.
Kohl's said in February it aims to "re-energize" the brand in 2013 through increased advertising and inventory management.
The company's shares rose to $53.20 in trading before the bell. They closed at $49.68 on the New York Stock Exchange on Wednesday.
(Reporting by Siddharth Cavale in Bangalore and Phil Wahba in New York; Editing by Sriraj Kalluvila)