Kohl’s Inc. raised its outlook for the year after reporting second-quarter earnings and sales handily topped Wall Street’s targets.

In the quarter ended July 31, earnings rose to $382 million, or $2.48 a share, from $47 million, or 30 cents, a year ago. On an adjusted basis, Pro-forma earnings reached $382 million, or $2.48 a share, against a loss of $39 million, or 25 cents, a year ago. Wall Street’s consensus estimate had been $1.26.

Sales climbed 30.5 percent to $4.45 billion from $3.41 billion. Wall Street’s consensus estimate had been $3.96 billion.

Gross margins in the latest quarter grew to 42.5 percent from 33.1 percent. Selling, general and administrative expenses improved 18.2 percent to $1.24 billion from $1.05 billion. As a percent of sales, SG&A declined to 27.9 percent from 30.8 percent.

“Our performance in the second quarter marked another important step in further establishing Kohl’s as the leading destination for the active and casual lifestyle. We delivered record second-quarter earnings with sales and margins materially exceeding expectations. As pleased as we are with our ongoing strategic progress, much of our opportunity is still ahead of us. We are on the eve of launching several transformational partnerships that will drive sustainable growth for years to come,” said Michelle Gass, Kohl’s chief executive officer.

“Based on our results, we are raising our full-year 2021 guidance, which positions us to achieve many of our 2023 strategic goals this year, well ahead of our plan. In addition, we have accelerated our share repurchase activity, underscoring our confidence in the business and our commitment to creating shareholder value,” said Gass.

Updated 2021 Financial Outlook
The company is raising its full-year 2021 financial outlook to include the following:

  • Net sales are now expected to increase in the low-20s percentage range compared to the previous expectation of mid-to-high teens percentage range increase;
  • Operating margin is now expected to be in the range of 7.4 percent to 7.6 percent compared to the previous expectation of 5.7 percent to 6.1 percent; and
  • Adjusted earnings per share are now expected to be in the range of $5.80 to $6.10, excluding non-recurring charges, compared to the previous expectation of $3.80 to $4.20.

Photo courtesy Kohl’s/Detroit Free Press