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Kohl's (KSS) Q3 Earnings & Sales Beat Estimates, View Raised

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·5 min read
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  • KSS
  • DG
  • DLTR
  • BURL

Kohl's Corporation KSS raised its guidance for fiscal 2021 yet again, after posting spectacular third-quarter fiscal 2021 results. During the quarter, the top and the bottom line advanced year over year and beat their respective Zacks Consensus Estimate.

The company’s record results reflect better-than-anticipated sales and margins. Management is impressed with its strategic efforts to transform Kohl’s into a leading destination for active and casual lifestyle products. During the fiscal third quarter, Kohl's accelerated growth in Active category and successfully launched various brand partnerships. In this regard, the company rolled out the initial 200 Sephora at Kohl’s stores. Management raised its fiscal 2021 view, while ramping up its share buyback activity.

Kohl's Corporation Price, Consensus and EPS Surprise

Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation Price, Consensus and EPS Surprise

Kohl's Corporation price-consensus-eps-surprise-chart | Kohl's Corporation Quote

Quarter in Detail

Kohl's posted adjusted earnings of $1.65 per share, which increased significantly from earnings of 1 cent reported in the year-ago period. The bottom line also surpassed the Zacks Consensus Estimate of 69 cents per share.

Total revenues came in at $4,600 million, up 15.6% from the prior-year quarter’s levels. The metric surpassed the Zacks Consensus Estimate of $4,572.3 million. Net sales jumped 15.5% in the quarter to $4,366 million, while comparable sales grew 14.7%

Kohl's gross margin expanded from 35.8% to 39.9% during the reported quarter. SG&A expenses increased 6% to $1,380 million. As a percentage of total revenues, SG&A expenses declined to 30% in the quarter from the prior-year quarter’s level of 32.7%. The company reported an operating income of $387 million, higher than the year-ago quarter’s figure of $22 million.

Other Financial Details

Kohl’s ended the quarter, with cash and cash equivalents of $1,873 million, long-term debt of $1,909 million and shareholders’ equity of $4,931 million. The company generated net cash from operating activities of $1,774 million during the nine-months period ended Oct 30, 2021.

During the quarter, Kohl’s repurchased shares worth $506 million. Management plans to make share buybacks of $1.3 billion in 2021.

On Nov 10, 2021, the company declared a quarterly cash dividend of 25 cents per share, which is payable on Dec 22 to shareholders of record as of Dec 8.

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Zacks Investment Research

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Outlook

The company is raising its guidance for fiscal 2021. Management now expects net sales to grow in the mid-twenties percentage range. Earlier, the company had anticipated the metric to grow in low-twenties percentage rate.

The operating margin is now likely to be 8.4-8.5%, up from the previous expectation of 7.4-7.6%. Kohl’s now envisions adjusted earnings per share in the range of $7.10-$7.30 compared with the $5.80-$6.10 anticipated before.

Shares of the Zacks Rank #3 (Hold) company have increased 1.5% in the past three months compared with the industry’s growth of 37.5%.

Upcoming Earning Releases in the Retail-Wholesale Sector

Dollar Tree, Inc. DLTR is slated to report earnings on Nov 23, 2021. The company is likely to register a decline in the bottom line when it reports third-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at 95 cents per share, projecting a 31.7% slump from the year-ago quarter’s reported number.

Dollar Tree’s top line is expected to grow year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $6,423 million, which suggests growth of almost 4% from the figure reported in the prior-year quarter. DLTR presently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Burlington Stores, Inc. BURL is slated to report earnings on Nov 23, 2021. The company is likely to register an uptick in the bottom line when it reports third-quarter fiscal 2021 results. The consensus mark for quarterly earnings has remained unchanged in the past 30 days at $1.27 per share, projecting a significant rise from 29 cents reported in the year-ago quarter.

Burlington Stores’ top line is also expected to grow year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,285 million, which suggests a rally of 37.3% from the figure reported in the prior-year quarter. BURL presently carries a Zacks Rank #4 (Sell).

Dollar General Corporation DG is slated to report earnings on Dec 2, 2021. The company is likely to register a decline in the bottom line when it reports third-quarter fiscal 2021 earnings. The Zacks Consensus Estimate for quarterly earnings is unchanged in the past 30 days at $2.02 per share, projecting a 12.6% fall from the year-ago quarter’s reported number.

Dollar General’s top line is expected to rise year over year. The consensus mark for quarterly revenues is pegged at $8,488 million, which suggests an increase of 3.5% from the figure reported in the prior-year quarter. DG presently carries a Zacks Rank #4.


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