Kohl’s released preliminary fourth-quarter results, anticipating sales will be down about 10 percent year-over-year, and same-store sales will drop 11 percent.
Fourth-quarter diluted earnings per share expected to be in the range of $1.00 to $1.05, before considering any impact from tax planning strategies. Analysts had been calling for earnings of 70 cents per share, on an adjusted basis.
These preliminary results reflect a better than expected gross margin rate and strong SG&A expense management. Gross margin continued to benefit from disciplined inventory management and further optimization in promotional strategies. SG&A expense decline was driven primarily by reductions in store, marketing and technology expenses.
“We are very pleased with the continued progress we are making against the strategic framework we outlined in October 2020. Our fourth-quarter performance exceeded our expectations across all key metrics with sales strengthening as we moved through the period. Digital sales growth remained strong, up more than 20 percent, and accounted for more than 40 percent of net sales, with our stores playing a critical role in supporting the heightened demand. Our focus on gross margin showed further traction and we managed expenses tightly, which together strengthened our financial position. I want to thank all of our associates for their exceptional service during the highly unique holiday period,” said Michelle Gass, Kohl’s chief executive officer.
“As we carry this momentum into 2021, we are confident that our key strategic initiatives will accelerate our top-line growth and expand our operating margin. Our partnership with Sephora will launch this Fall in 200 stores and online, commencing a multi-year buildout that will drive significant growth for Kohl’s,” said Gass. “We look forward to sharing more on this and our other initiatives, as well as providing more detail on our path to 7 percent to 8 percent operating margin, on our upcoming earnings call in March.”
Full fourth-quarter results will be released on March 2.
Photo courtesy Kohl’s