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People walk near a Kohl’s department store entranceway on June 07, 2022 in Doral, Florida.
Joe Raedle | Getty Images
Kohl’s shares spiked early Wednesday as the struggling retailer posted a surprise profit while it chases a turnaround.
Shares jumped more than 12% in premarket trading.
The retailer reiterated its full-year outlook. It said it expects net sales to range between a decline of 2% and a decline of 4%, including the approximately 1% impact from having one more week of sales this year. It said it expects diluted earnings per share to range from $2.10 to $2.70, excluding nonrecurring charges.
Here’s how the retailer did for the quarter that ended April 29 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: 13 cents vs. a loss of 42 cents, expected
- Revenue: $3.36 billion vs. $3.34 billion
Kohl’s surprise quarterly profit comes after multiple quarters of disappointing sales and a sinking stock price. Last year, the retailer became a target for activist investors Ancora Holdings and Macellum Capital, which pushed the company to oust its then-CEO Michelle Gass and shake up its board. Kohl’s also discussed and then ended a bid last year to sell its business to Vitamin Shoppe owner Franchise Group.
Since then, Kohl’s has tapped a new CEO: Tom Kingsbury, the former chief executive of off-price retailer Burlington Stores. Gass, its former CEO, left to become the next leader of Levi Strauss.
In more recent months, Kohl’s efforts to reinvent itself and woo shoppers have run into other obstacles. Many middle-income shoppers feel squeezed by inflation and are buying fewer discretionary items, such as clothing.
Despite that, Kingsbury said Kohl’s made progress in the fiscal first quarter. He said the company has reduced excess inventory, attracted customers with Sephora shops and made stores more productive.
“Our first quarter results were in line with our expectations and represented a first step as we work to drive sales and earnings performance over the long-term,” he said in a news release.
In the fiscal first quarter, Kohl’s reported a net income of $14 million, or 13 cents per share, compared with $14 million, or 11 cents per year, a year earlier.
Net sales fell to $3.36 billion from $3.47 billion in the year-ago period.
Kohl’s comparable sales declined 4.3% in the quarter, roughly in line with the 4.5% drop expected by Wall Street, according to StreetAccount.
Shares of Kohl’s closed Tuesday at $19.27. That’s less than half of its 52-high, which was $47.63. The company’s stock has tumbled nearly 23% so far this year — even as the S&P 500 has risen about 8% and the retail-focused XRT has fallen nearly 2%.
This story is breaking news. Please check back for updates.
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