Kohl's lifts outlook after second-quarter earnings beat

28th Aug 2024 12:41

(Sharecast News) - Kohl's raised its annual profit forecast on Wednesday, after surpassing expectations for second-quarter earnings, driven by stringent cost management and reduced inventory levels.

The US department store retailer's shares rose in premarket trading, although they remained down more than 31% for the year.

For the second quarter, the company reported earnings of 59 cents per share, significantly above the expected 45 cents per share.

It attributed its earnings improvement to strategic clearance events earlier in the year, which allowed for the introduction of fresher styles in key categories such as footwear, baby products, and women's dresses ahead of the crucial spring shopping season.

Inventory levels dropped 9% in the second quarter, following a 13% decline in the first quarter.

Kohl's said it now anticipated diluted earnings per share for the full year to range between $1.75 and $2.25, up from its previous forecast of $1.25 to $1.85.

However, Kohl's lowered its annual net sales target after reporting a larger-than-expected 5.1% drop in comparable sales for the second quarter, against analysts' expectations of a 2.19% decline.

It now forecasts a decline in annual net sales between 4% and 6%, compared to its previous estimate of a 2% to 4% drop.

The company said it still faced challenges with customer spending, as shoppers exercised more caution, impacting sales even as transaction frequency increased, although it benefited from strong demand at its in-store Sephora beauty concessions.

At 0816 EDT (1316 BST), shares in Kohl's Corporation were up 3.16% in premarket trading in New York, at $20.22.

They had closed down 1.36% ahead of the results on Tuesday, at $19.60.

Reporting by Josh White for Sharecast.com.