Kohl's posts lower profit, cuts forecast

ATLANTA (Reuters) - Kohl's Corp (KSS.N: Quote, Profile, Research, Stock Buzz), a mid-priced retailer of apparel and home goods, reported a nearly 14 percent drop in third-quarter net income, and cut its earnings forecast for the holiday selling season and full year.

The company's shares fell more than 2 percent in extended trading.

Net income fell to $194 million, or 61 cents a diluted share, for the third quarter ended November 3, from $224.5 million, or 68 cents a share, in the year-ago period.

Analysts expected profit of 60 cents a share, according to Reuters Estimates.

Total sales rose about 5 percent to $3.8 billion, below analysts' estimates of $3.9 billion, according to Reuters Estimates. Sales at stores open at least a year fell 2.6 percent as the average purchase decreased.

"We're being very very conservative about what could happen in the fourth quarter, and hopefully business will improve as the weather gets cooler," Chief Financial Officer Wes McDonald said during a conference call.

The company said weather-sensitive goods showed significant weakness in the quarter, with the children's category most affected.

But Kohl's added that accessories, beauty and jewelry sales were strong, and said it was "extremely pleased" with the performance of clothing by designer Vera Wang and Food Network kitchen gadgets, two recently launched product lines.

The company in recent months cited pressure on its business from the weak U.S. housing market and promotions from rivals, and earlier this month had slashed its earnings estimates for the third quarter.