Shares of Kohl's Corporation (NYSE: KSS) climbed 13% in December, according to data from S&P Global Market Intelligence, as investors celebrated signs of a continued strong holiday shopping season for the department-store chain.
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There was no one glaring catalyst for Kohl's impressive run. Rather, shares rose thanks to a combination of the strong economy, sustained consumer confidence, and low gas prices. It also helped that Christmas fell on a Monday this year, with the preceding weekend conveniently serving as a call to action for last-minute shoppers to get out of the house.
Kohl's wasn't the only retailer to enjoy solid gains in December. Shares of Gap simultaneously climbed almost 5%, Target jumped 5.8%, and Macy's rose 6.6%. Each stock handily outpaced the S&P 500's roughly 2% return over the same period.
But Kohl's, in particular, has come roaring back from multiyear lows in June, when the continued rise of value-oriented, online-centric retailers left investors fearing the worst for the future of primarily brick-and-mortar chains.
In November, however, those fears were partially alleviated when Kohl's posted a surprise 0.1% increase in comparable-store sales for the third quarter, followed by an update from management late in the month indicating the company enjoyed significantly stronger trends both in stores and online for the crucial Thanksgiving and Black Friday shopping days. Kohl's stock only continued to rise form there, with investors speculating that the company has been able to sustain its relative outperformance through the entirety of the season.
Kohl's next quarterly report is slated for early March. But we may not need to wait that long for color on whether the recent rise was merited. Many industry watchers expect Kohl's and its peers will issue updates on their respective November and December sales as early as this week. If that happens, and depending on the nature of those updates, I expect Kohl's to either give back the bulk of its recent gains, or continue its impressive bounce.
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