Kohl's Corp. reported its third-quarter profit rose 20 percent, helped by cost cuts and demand for exclusive brands such as lines by Jennifer Lopez and Marc Anthony. The department store operator also raised its full-year outlook.

Net income rose to $211 million, or 80 cents per share, from $176 million, or 57 cents per share a year ago and matched analyst expectations.

Revenue rose 4 percent to $4.38 billion from $4.22 billion last year. Revenue in stores open at least one year rose 2.1 percent.

On a year-to-date basis, diluted earnings per share increased 26 percent to $2.56. Net income was $711 million, compared with $626 million ($2.03 per diluted share) for the first nine months of fiscal 2010. Net sales were $12.8 billion, an increase of 3.5 percent. Year-to-date comparable store sales increased 1.7 percent.

Kevin Mansell, Kohl's chairman, president and chief executive officer, said, “I am extremely pleased with our ability to deliver strong net income and earnings per share growth in a challenging sales environment. Our gross margin rate increased over last year as a result of our increased penetration of private and exclusive brands and disciplined inventory management. We are pleased with the expense management discipline across the company that allowed us to grow our expenses less than we originally planned.”

Mansell added, “The launch of our Jennifer Lopez and Marc Anthony brands during the quarter met our aggressive sales plans. We expect our collection of powerful brands supported by significant marketing investments, especially in broadcast and digital media, to deliver a strong Holiday season.”

Store Update

Kohl's opened 40 stores during 2011, including 31 during the third quarter, and now has 1,127 stores in 49 states, compared with 1,089 stores at the same time last year. The Company completed the remodel of 15 stores during the third quarter, bringing the total number of stores remodeled in 2011 to 100.

Earnings Guidance

For the fourth quarter, Kohl's expects total sales to increase between 4 and 6 percent and comparable store sales to increase between 2 and 4 percent. Gross margin as a percent of sales is expected to change between (10) and 10 basis points. Selling, general and administrative expenses are expected to increase between 5 and 6 percent. Assuming share repurchases of approximately $300 million in the fourth quarter, achieving these assumptions would result in earnings per diluted share of $1.93 to $2.04 for the fourth quarter.

As a result of its third quarter performance and its fourth quarter assumptions, Kohl's is increasing its fiscal 2011 guidance from $4.34 to $4.49 per diluted share to $4.41 to $4.52 per diluted share.