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Kohl's (KSS) Stock Up on Q4 Earnings Beat, Higher Revenues

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Kohl's Corporation KSS posted fourth-quarter fiscal 2021 results, wherein the bottom line beat the Zacks Consensus Estimate, while the top line missed the same. Earnings per share (EPS) declined year over year, whereas revenues increased. The company delivered a record-high EPS in 2021. Also, its operating margin surpassed its 2023 target, ahead of the plan. This was backed by the company’s restructuring efforts. Shares of the company rose more than 3% during the pre-market trading session on Mar 1.

Quarter in Detail

Kohl's posted adjusted earnings of $2.20 per share, which dipped 1% from $2.22 reported in the year-ago period. However, the bottom line surpassed the Zacks Consensus Estimate of $2.10 per share.

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

Total revenues came in at $6,499 million, up 5.8% from the prior-year quarter’s levels. The metric fell short of the Zacks Consensus Estimate of $6,776 million. Net sales grew 5.8% in the quarter to $6,220 million.

Kohl's gross margin expanded from 32% to 33.2% during the reported quarter. SG&A expenses increased 5.2% to $1,687 million. As a percentage of the total revenues, SG&A expenses declined to 26% in the quarter from the prior-year quarter’s level of 26.1%. The company reported an operating income of $450 million, higher than the year-ago quarter’s figure of $316 million.

For full-year 2021, EPS came in at $7.33 against a loss of $1.21 in the year-ago period. Total revenues advanced 21.8% to $19,433 million. The Zacks Consensus Estimate for full-year EPS and revenues was pegged at $7.26 and $19.7 billion.

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Other Financial Details

Kohl’s ended the quarter with cash and cash equivalents of $1,587 million, long-term debt of $1,910 million and shareholders’ equity of $4,661 million. KSS generated net cash from operating activities of $2,271 million during the twelve-month period ended Jan 29, 2022.

During the quarter, Kohl’s repurchased shares worth $548 million. In 2021, the company bought back shares worth $1.355 billion. Management approved a repurchase plan worth $3 billion and intends to buy shares worth at least $1 billion in 2022.

Kohl’s hiked its quarterly dividend by 100%, which takes its annual dividend to $2.00 per share. On Feb 28, 2022, KSS declared a quarterly cash dividend of 50 cents per share, which is payable on Mar 30, 2022 to shareholders of record as of Mar 16.

The company anticipates capital expenditures of about $850 million for the full year of 2022, which includes the expansion of its Sephora tie-up and store refurbishment actions.

Guidance

For full-year 2022, management expects net sales to grow 2-3%. The operating margin is likely to be 7.2-7.5%. Kohl’s envisions EPS in the range of $7.00-$7.50 (excluding non-recurring charges). The company posted adjusted EPS of $7.33 in full-year 2021.

Shares of this Zacks Rank #3 (Hold) company have decreased 11.5% in the past three months against the industry’s growth of 2.2%.

3 Retail Stocks for You

Here are three better-ranked stocks, including Builders FirstSource, Inc. BLDR, Dillard's DDS and Dollar Tree DLTR.

Builders FirstSource, the manufacturer and supplier of building materials, manufactured components and construction services, sports a Zacks Rank #1 (Strong Buy) at present. Builders FirstSource shares have risen 6% in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Builders FirstSource’s 2022 sales suggests a drop of 8.2% from the year-ago period’s reading. BLDR has a trailing four-quarter earnings surprise of 71.5%, on average.

Dillard's, a retail department stores operator, currently has a Zacks Rank #2 (Buy). Dillard's has a trailing four-quarter earnings surprise of 8.8%, on average.

The Zacks Consensus Estimate for Dillard's current financial-year sales suggests growth of 4.7% from the year-ago period’s tally. DDS has an expected EPS growth rate of 12.2% for three to five years.

Dollar Tree, the operator of discount variety retail stores, holds a Zacks Rank #2 at present. Dollar Tree has a trailing four-quarter earnings surprise of 8.8%, on average. DLTR has an expected EPS growth rate of 12.2% for three to five years.

The Zacks Consensus Estimate for Dollar Tree’s current financial-year sales suggests growth of 3.4% from the year-ago period’s reported figure.


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