Kohl’s Posts Q1 Profit Decline and Cuts Annual Guidance
A slow start to the year has Kohl’s Corp. now planning more conservatively, including a cut in its annual earnings guidance.
In a Nutshell: The retailer’s chief executive officer, Michelle Glass, said, “The year has started off slower than we’d like, with our first quarter sales coming in below our expectation. We are actively addressing the opportunities that impacted our first quarter sales and we have strong initiatives that will enhance our sales performance in the second half.”
Among those Glass cited were the retailer’s nationwide rollout of its Amazon returns program and other “important brand launches and program expansions.”
Net Sales: Total revenues for the quarter ended May 4 fell 2.9 percent to $4.09 billion from $4.21 billion. That included a 3.3 percent decrease in net sales to $3.82 billion from $3.95 billion. The retailer said comparable sales fell 3.4 percent in the quarter.
Earnings: Kohl’s reported a lower profit for the quarter, with net income at $62 million, or 38 cents a diluted share, from net income of $75 million, or 45 cents, a year ago. On an adjusted basis, the company said the diluted earnings per share (EPS) was 61 cents.
Wall Street had expected adjusted diluted EPS of 67 cents on revenues of $3.95 billion.
Kohl’s lowered its annual guidance for adjusted diluted EPS to between $5.15 to $5.45, versus prior guidance of $5.80 to $6.15.
CEO’s Take: Glass said, “Operationally, the team reacted appropriately throughout the quarter by managing expenses in line with our expectations. While we are planning the year more conservatively, we continue to invest in our business and operate with a view on our long-term success.”