Kohl's (KSS) Q3 Earnings Top Estimates, Stock Down on Low Sales
Kohl's Corporation KSS posted soft third-quarter fiscal 2022 results. Both the top and bottom lines declined year over year and the former fell short of the Zacks Consensus Estimate.
Due to the recent volatile business trends, major macroeconomic headwinds and an unanticipated CEO transition, management withdrew its old view for fiscal 2022 and did not offer any guidance for the fourth quarter. Shares of the company fell more than 3% during the pre-market trading session on Nov 17.
Management created a search committee to look for a new CEO, with Tom Kingsbury serving as the interim CEO during the transition phase.
Quarter in Detail
Kohl's posted adjusted earnings of 82 cents per share, which plunged 50% from the $1.65 reported in the year-ago period. However, the bottom line came a penny ahead of the Zacks Consensus Estimate of 81 cents.
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation price-consensus-eps-surprise-chart | Kohl's Corporation Quote
Total revenues came in at $4,277 million, down 7% from the prior-year quarter’s levels. The metric also missed the Zacks Consensus Estimate of $4,289 million. Net sales dipped 7.2% year over year, and comparable sales or comps decreased by 6.9%.
Kohl's gross margin contracted 263 basis points (bps) to 37.3% in the reported quarter. SG&A expenses fell by 3.3% to $1,334 million. As a percentage of total revenues, SG&A expenses expanded 120 basis points to 31.2%. The company reported an operating income of $200 million, lower than the year-ago quarter’s figure of $387 million.
Other Financial Details
Kohl’s ended the quarter with cash and cash equivalents of $194 million, long-term debt of $1,747 million and shareholders’ equity of $4,096 million. KSS used net cash from operating activities of $425 million during the nine-month period ended Oct 29, 2022.
On Nov 9, 2022, Kohl’s declared a quarterly cash dividend of 50 cents per share, payable on Dec 21, 2022, to shareholders of record as of Dec 7. On Nov 2, the company concluded its accelerated share repurchase agreement of nearly $500 million.
Shares of this Zacks Rank #3 (Hold) company have decreased 5% in the past three months compared to the industry’s growth of 8.7%.
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Dillard's DDS operates retail department stores. DDS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dillard's current financial-year sales and earnings suggests growth of 6.6% and 3.4%, respectively, from the year-ago reported figure. Dillard's has a trailing four-quarter earnings surprise of 1442%, on average.
Dollar General DG is a discount retailer offering various merchandise products. DG currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Dollar General’s current financial-year earnings suggests growth of 13.8% from the year-ago reported figure. Dollar General has a trailing four-quarter earnings surprise of 2.2%, on average.
Sprouts Farmers SFM offers fresh, natural and organic food products. The stock currently carries a Zacks Rank #2. SFM has an expected EPS growth rate of 10.4% for three to five years.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year revenues and EPS suggests an increase of 4.6% and 9.5%, respectively, from the year-ago reported figure. Sprouts Farmers has a trailing four-quarter earnings surprise of roughly 10%, on average.
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