Kohl’s Stock Soars In Premarket Despite Lower Sales 

(CTN News) – Kohl’s Corporation (NYSE:KSS) reported a profit in the first quarter, sending the company’s share price sharply higher ahead of market opening.

According to the retailer, which is undergoing a turnaround under the direction of new Kohl’s CEO Tom Kingsbury, sales for the 13 weeks ending April 29, 2023 dropped a larger-than-expected 3.3% to $3.4 billion, with comparable sales declining 4.3% over the same period.

In spite of the decrease in its gross margin to 39% in the first quarter, it was still able to achieve a 4.2% reduction in selling, general, and administrative Kohl’s  (SG&A) expenses to $1.2 billion in the same period.

As a result, the company’s net income was steady at $14 million during the quarter, while it’s earnings per share were up 18% to $0.13, resulting in a quarterly loss of $0.42 per share.

Comparatively, Wall Street analysts had predicted a quarterly loss per share of $0.42, based on Wall Street’s forecasts.

According to the company’s earnings statement, “our first quarter results were in line with our expectations, and this represents a first step in our efforts to drive sales and earnings performance in the long run,” Kingsbury said.

“We exceeded our expectations in terms of margin expansion and inventory reduction by 6%.”. Additionally, our stores’ businesses were able to achieve productivity gains and Sephora at Kohl’s maintained its strong sales growth.”

A 2% to 4% decline in net sales is expected for the full year for the company, which includes the effect of an additional week in the calendar.

If non-recurring charges are excluded, the Kohl’s company expects diluted earnings per share of between $2.10 and $2.70 in the third quarter.

As part of our 2023 priorities, Kingsbury stated that we are making progress to achieve each of them, including improving customer experience, Kohl’s simplifying our value strategies, managing inventory and expenses with discipline, and strengthening our balance sheet.

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