* Second-qtr EPS $1 vs Street View 96 cts
* Sees 3rd-qtr same-store sales flat to up 2 pct
* Shares lower in premarket
Aug 9 Kohl's Corp reported a
better-than-expected second-quarter profit on Thursday despite
weak sales as the retailer reined in its costs and forecast
business would improve during the back-to-school quarter.
Kohl's, which competes most directly with Macy's Inc
and J.C. Penney Co Inc, forecast sales at stores open at
least year, or same-store sales, would be flat to up 2 percent
in the current quarter, an improvement over its weak first half.
As previously reported, the retailer's total sales for the
quarter fell 1 percent while same-store sales were down 2.7
percent, well below what the company forecast three months ago.
Morningstar analyst Paul Swinand said Kohl's same-store
forecast, while an improvement, was still modest given that the
company said its inventory levels have improved.
Kohl's paid a price for its overly cautious merchandise
inventory management earlier this year, which led to shortages
for popular items, costing it sales and leaving it unable to
take advantage of the sales hemorrhage at Penney, which has lost
shoppers since largely eliminating coupons and special events
Kohl's also struggled earlier this year when shoppers balked
at its reduced discounts on its less expensive items.
Wall Street saw Kohl's same-store sales forecast as tepid.
"We believe Kohl's suffers from not having a strong assortment
of brands consumers want, which, in our view, has created a
traffic issue," Nomura analyst Paul Lejuez said in a research
But in July, Kohl's sales started to perk up as it got
sufficient merchandise for the start of back-to-school shopping,
which after the holiday season is the most important time of
year for Kohl's and its peers.
Chief Executive Kevin Mansell said the retailer had met its
goal of having better inventory levels for the autumn season.
Kohl's, which operates 1,134 stores, expects third-quarter
earnings of 83 cents to 89 cents per share, compared with the 87
cents Wall Street analysts had been expecting, according to
Thomson Reuters I/B/E/S.
Kohl's posted a second-quarter profit of $240 million, or $1
per share, down from $299 million, or $1.08 per share, a year
earlier. That beat analyst forecasts by 4 cents.
Its gross margin fell 1.7 points to 39 percent of sales, a
smaller than expected drop.
Its shares slipped 6 cents to $52 in premarket trading.