Kohl's Inc. reported a first-quarter profit of $199 million, or 64 cents
a share, up from $137 million, or 45 cents, a year earlier. Revenue rose 11% to $4.04 billion from $3.64 billion last year.
Gross profit margins rose to 38.1 percent from 37.6 percent.
During the quarter, Kohl's opened nine stores, for a total of 1,067. That compares with 1,022 stores a year ago. Kohl's expects to open 21 more this year. The chain finished remodeling 17 stores during the first quarter and plans to remodel 68 more later this year.
The retailer raised its full-year guidance, but even the higher forecast for the second quarter and full year were short of analysts' expectations.Gross margin rose to 38.1% from 37.6% and same-store sales increased
7.4%.
Kohl's Corp.
(KSS), which reported strong quarterly sales, says business is improving across the country, but stopped short of saying economic conditions are back to normal.
The department-store chain, which has been one of the best performing retailers during the economic downturn, said its sales swelled as a result of greater demand and market share as it improved online services and expanded use of its own brands and exclusive apparel by designers like Vera Wang and Dana Buchman.
“People did buy more merchandise than a year ago, but they are still indicating deep caution,” Chief Executive Kevin Mansell said in an interview.
Kohl's is taking several steps to bring current and new customers through its door. The measures include taking a more local approach, a strategy that rival Macy's Inc. (M) appears to be using effectively based on the solid first-quarter results it posted on Wednesday. Also like Macy's, Kohl's feels it is taking market share. The gains are coming at the expense of other department stores and mass merchants, Mansell said. Digital efforts include Kohl's setting up in-store kiosks to connect customers with the company's website and piloting in-store screens that carry product and pricing information.
Kohl's first-quarter results showed it is seeing customer traffic, as transactions rose almost 9%, their biggest increase in almost eight years. Home goods, footwear and women's merchandise saw some of the best growth rates. Mansell also said that some categories, like home goods and footwear, are starting to see signs of inflation, coming after a lengthy period of falling prices.
Kohl's did raise its earnings projection for the full year but provided guidance for the current quarter that is below Wall Street's expectations. “We think, in a continued uncertain environment, it's a rational way to approach things,” Mansell said. “Consumers are still pressured by the same issues.”
The retailer expects sales at stores open more than a year to rise in the 2% to 4% range for the second quarter and its gross margin to grow by 20 to 30 basis points after increasing 48 basis points in the first quarter.
Last week, Kohl's said revenue jumped 11% to $4.04 billion, and same-store sales rose 7.4%, outpacing the retailer's February forecast.
Kohl's raised its profit outlook for the year to $3.57 to $3.75 a share from February's view of $3.40 to $3.63. Kohl's also forecast current-quarter earnings of 70 cents to 75 cents a share, lower than the 88-cent consensus estimate of analysts surveyed by Thomson Reuters.
Kohl's shares are down $1.67, or 2.9%, to $55.48
