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second-quarter earnings report. The US department store retailer's shares experienced a rise in premarket trading, though they remain down more than 31% for the year.
For the second quarter, Kohl’s (LSE:0JRL) reported earnings of 59 cents per share, exceeding the anticipated 45 cents per share. The company attributed this improvement to effective cost management and reduced inventory levels, alongside successful strategic clearance events earlier in the year. These events enabled the introduction of newer styles in key categories such as footwear, baby products, and women's dresses, well before the crucial spring shopping season.
Inventory levels saw a 9% reduction in the second quarter, building on a 13% decline in the first quarter. This efficient inventory management played a significant role in the company's improved earnings.
Kohl’s has revised its annual earnings forecast upwards, now projecting diluted earnings per share between $1.75 and $2.25, compared to its earlier range of $1.25 to $1.85.
However, the company has adjusted its annual net sales target downward after reporting a larger-than-expected 5.1% decline in comparable sales for the second quarter. Analysts had forecasted a 2.19% decline. Kohl’s now anticipates a decrease in annual net sales between 4% and 6%, adjusting from the previous estimate of a 2% to 4% drop.
Despite these challenges, including cautious consumer spending and a 5.1% drop in comparable sales, Kohl’s has benefited from robust demand at its in-store Sephora beauty concessions. Increased transaction frequency has been noted, although overall customer spending remains subdued.
At 0816 EDT (1316 BST), Kohl’s Corporation shares were up 3.16% in premarket trading, reaching $20.22. This followed a 1.36% decline in shares on Tuesday, closing at $19.60 ahead of the earnings report.
