Kohl’s Corporation reduced its guidance due to soft holiday sales. Comparable sales decreased 2.1 percent in the fiscal months of November and December 2016 combined, compared with the prior-year period. Total sales for the combined fiscal November and December period decreased 2.7 percent.
“Sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December,” said Kevin Mansell, Kohl’s chairman, chief executive officer and president.
From a line of business perspective, Men’s, Home and Footwear were the strongest categories, while Accessories was the most challenging. On a regional basis, the Southeast, Mid-Atlantic and Northeast were the best performing regions.
Earnings Guidance
The company now expects its fiscal 2016 diluted earnings per share to be $2.92 to $2.97 versus its previous guidance of $3.12 to $3.32 per diluted share. Excluding impairments, store closing and other costs, fiscal 2016 diluted earnings per share is expected to be $3.60 to $3.65, down from the company’s previously stated guidance of $3.80 to $4.00 per diluted share.
The change in guidance is primarily a result of lower-than-planned sales for the quarter. Gross margin is projected to be lower than plan due to the mix and timing of the sales and the competitive promotional environment. SG&A expenses are projected to be as planned. Inventories per store at the end of the fourth quarter are projected to decrease from prior-year levels in the mid- to high-single-digit range.
