Kohl's profit down, stock slips on outlook

By Lisa Baertlein

LOS ANGELES (Reuters) - Kohl's Corp (KSS.N: Quote, Profile, Research, Stock Buzz), a U.S. retailer of apparel and home goods, reported a lower quarterly profit on Thursday and forecast profits below Wall Street targets, sending shares down about 1 percent.

Kohl's has been forced to increase promotional activity as its customers have slowed spending as U.S. home prices fall and prices for staples such as food and gasoline rise.

"We expect 2008 to be a challenging year from a macro-economic perspective," Kohl's Chief Executive Larry Montgomery said in a statement.

Still, the company reported same-store sales increases in accessories and beauty and said its exclusive brands including Vera Wang and Chaps performed well.

Kohl's forecast annual earnings of $3.15 to $3.50 per share and a profit of 50 cents to 54 cents per share for the first quarter.

Analysts polled by Reuters Estimates were looking for a full-year profit of $3.54 per share and a first-quarter profit of 57 cents per share.

Jefferies & Co analyst Daniel Binder said the forecast gave the company room to maneuver in an unpredictable economy.

"It was fairly wide. You could drive a Mack truck through it," said Binder, who added that analysts will have to lower already tempered expectations.