Department store chain Kohl’s (NYSE:KSS) will be reporting results tomorrow morning. Here’s what investors should know.
Last quarter Kohl’s reported revenues of $4.05 billion, down 5.2% year on year, beating analyst revenue expectations by 2.7%. It was a mixed quarter for the company. While same-store sales and net sales (excluding credit card operations revenue) missed expectations, gross margin and expense control was better, leading to a nice EPS beat vs. analysts’ expectations. Guidance was also mixed, with the full year outlook lowered for same-store sales but raised for EPS. However, with the full year operating margin maintained, the EPS raise is likely from non-fundamental factors such as lower interest expense or a lower tax rate.
Is Kohl’s buy or sell heading into the earnings? Read our full analysis here, it’s free.
This quarter analysts are expecting Kohl’s’s revenue to decline 4.2% year on year to $5.77 billion, improvement on the 7.4% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.29 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St’s revenue estimates twice over the last two years.
Looking at Kohl’s’s peers in the general merchandise retail segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Macy’s’s revenues decreased 2.4% year on year, beating analyst estimates by 3.5% and Nordstrom reported revenues up 2.3% year on year, exceeding estimates by 0.9%. Macy’s traded down 1.5% on the results, and Nordstrom was down 10%.
Read our full analysis of Macy’s’s results here and Nordstrom’s results here.
Investors in the general merchandise retail segment have had steady hands going into the earnings, with the stocks up on average 1.4% over the last month. Kohl’s is down 1.4% during the same time, and is heading into the earnings with analyst price target of $26.2, compared to share price of $27.4.
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