Kohl’s Corporation (NYSE: KSS) stock fell by more than 4 percent on Tuesday after the company reported first-quarter earnings and revenue that beat Wall Street’s expectations, but acknowledged that the company got a 3.2 percent sales boost by shifting a friends and family event into the first quarter.
Kohl’s reported first-quarter adjusted earnings per share of 64 cents on revenue of $4.21 billion. Analysts had been expecting EPS of 50 cents and revenue of $3.95 billion. Revenue was up 3.5 percent compared to a year ago.
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Same-store sales in the first quarter were up 3.6 percent, ahead of consensus analyst estimates of 2.7 percent.
Kohl’s reported gross margin of 36.9 percent, up 0.5 percent.
“We built on our recent momentum and achieved our third consecutive quarter of positive comparable sales, which increased on both a fiscal and a shifted basis,” CEO Michelle Gass says in a statement. “Further, we exceeded the high end of our margin expectations through continued focus on inventory management, while expenses were consistent with our expectations as we continue to make investments to ensure our long-term success.”
On its earnings call, management said first-quarter comparable sales were boosted by a shift in scheduling for a friends and family event, suggesting that the reported numbers may not have been as good as they initially seemed.
Looking ahead, Kohl’s raised its full-year adjusted EPS guidance from a previous range of between $4.95 and $5.45 to a new range of between $5.05 and $5.50.
Over the past five years, Kohl’s has been working to improve its inventory management to help boost margins. Kohl’s has also tried some creative ways to improve profitability, including partnering with Amazon.com ( AMZN) to sell Amazon products and accept Amazon returns in Kohl’s stores. Kohl’s also recently announced a partnership to lease unused space within Kohl’s stores to grocery chain Aldi.
CFRA analyst Efraim Levy says he likes Kohl’s aggressive approach.
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“We see KSS taking actions to drive traffic and improve sales, including testing of a new beauty assortment in 214 stores, rollout of a customer loyalty program that was piloted in Texas to California, and other select markets, new brand introductions and greater focus on national brands in advertising,” Levy says.
However, CFRA sees too much uncertainty in the retail space to recommend owning the stock at this time.
CFRA has a “hold” rating and $65 price target for KSS stock.
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Kohl’s Corporation (KSS) Stock Slumps Following Earnings Call originally appeared on usnews.com
