(Reuters) - Kohl’s Corp posted far stronger same-store sales for the holidays than its bigger peers, as a revamp of its business model and a strategy to have more stand-alone department stores rather than at struggling shopping malls paid off.
Kohl’s shares jumped nearly 9 percent to $59.07 on Monday, their highest since December 2016, after the retailer reported a 6.9 percent rise in same-store sales for November and December, putting it on track for its best holiday quarter in three years.
Analysts said that came courtesy of a revamp of Kohl’s beauty departments and an increase in space for Under Armour Inc’s sportswear, as well as a direct partnership with Amazon.com to sell its smart-home products.
Store checks by industry research firm Retail Metrics also showed Kohl’s was one of the busiest department chains during the holiday season due to its mix of low price private-label apparel offerings and desirable national brands.
“Even if Kohl’s has a very weak January, (it) is poised to turn in its strongest quarterly same store sales gain in at least 3 years,” said Retail Metrics President Ken Perkins.
Kohl’s same-store sales growth topped the 1-4 percent increase posted by J.C. Penney Co Inc and Macy’s Inc. Shares of Macy‘s, among the biggest victims of the shift to online shopping, fell 2.4 percent. Those of JC Penney were up 1.2 percent, reversing from a drop of nearly 1 percent.
“Unlike peers JCP and Macy‘s, Kohl’s enjoyed consistent results in both November and December, with traffic in store positive while digital sales came in well ahead of the year-to-date trend,” Gordon Haskett analyst Chuck Grom said.
The figures follow a MasterCard Advisors report in late December that showed shoppers spent more than $800 billion in stores and online between Nov. 1 and Dec. 24, a new record.
Separately, Canadian sportswear chain Lululemon Athletica Inc said the holiday season was better than it had expected and raised its profit and revenue forecasts for the fourth quarter.
Kohl’s said it now expects fiscal 2017 earnings per share to come in between $4.10 and $4.20, versus its previous forecast of $3.72 to $3.92.
Analysts on average were expecting a profit of $3.64, according to Thomson Reuters I/B/E/S.
The company also said its guidance did not include the impact of recent changes in U.S. corporate taxes, which are expected to benefit its effective tax rate and generate a favorable non-cash tax benefit.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D'Souza