Kohl’s Corp.’s top and bottom-line results for the third quarter came out ahead of expectations, motivating the company to raise its full year guidance.
The third quarter report and the elevated guidance catapulted Kohl’s stock price up 25 percent to about $19.73 in pre-market trading Tuesday morning.
The Menomonee Falls, Wisc.-based, value-oriented family chain said the results reflected progress in turnaround initiatives. Private brands, petites, fashion and fine jewelry, Sephora, opening price points and coupons are central to the value-oriented, family chain’s strategy.
Net sales for the third quarter ended Nov. 1 decreased 2.8 percent year-over-year, to $3.4 billion, from $3.5 billion, with comparable sales down 1.7 percent.
Net income was $8 million, or $0.07 per diluted share, and adjusted net income was $11 million, or $0.10 per adjusted diluted share. This compares to net income of $22 million, or $0.20 per diluted share, in the prior year.
Inventory was $3.9 billion, a decrease of 5 percent year-over-year.
Cash flow provided by operating activities was $124 million compared to a $195 million in the prior year.
Gross margin as a percentage of net sales was 39.6 percent, an increase of 51 basis points.
“We are pleased with Kohl’s third quarter results, marking a third consecutive quarter of delivering top-line and bottom-line performance ahead of our expectations,” said Michael Bender, Kohl’s chief executive officer, in a statement Tuesday morning. “These results are a direct reflection of the progress we are making against our 2025 initiatives, reinforcing our confidence as we continue to move in the right direction. We are focused on building on this momentum, as we remain committed to delivering quality products, great value, and a frictionless experience to our customers in an uncertain macroeconomic environment.
“I am very proud of the work our team has accomplished to date, as we continue to operate our company with strong discipline, deliver solid cash flow generation, and maintain a healthy balance sheet,” Bender said. “This will serve as a strong foundation as we reposition Kohl’s for future growth.”
Michael Bender
Courtesy image
On Monday, Kohl’s promoted Bender to CEO from interim CEO.
Kohl’s raised its guidance for the full year 2025 and currently expects net sales to decline 3.5 percent to 4 percent, and comparable sales to decline 2.5 percent to 3 percent. The previous outlook called for net sales to decline 5 percent to 6 percent, and comparable sales to decline 4 percent to 5 percent.
Adjusted operating margin is now seen in the range of 3.1 percent to 3.2 percent, whereas the previous guidance called for adjusted operating margin in the range of 2.5 percent to 2.7 percent.
Adjusted diluted earnings per share is now expected in the range of $1.25 to $1.45. The previous guidance called for adjusted diluted EPS in n the range of $0.50 to $0.80.
The guidance on capital expenditures remained unchanged at approximately $400 million.
Kohl’s operates more than 1,100 stores in 49 states as well as Kohls.com and the Kohl’s app.
