Although Kohl’s Corp. saw a comparable sales decline in its second quarter, the retailer surpassed Wall Street estimates in the period with a boost from home products.
Net income was $153 million, or $1.35 per diluted share, versus $66 million, or 59 cents per diluted share, in the quarter a year before.
With any adjustments for one time events included, net income was $64 million, or 56 cents per adjusted diluted share, versus $66 million, or 59 cents per diluted share, in the year-past quarter, the company stated.
A Zacks Investment Research analyst consensus estimate had second quarter earnings per adjusted diluted share at 33 cents and revenue at $3.48 billion.
Comparable sales declined 4.2% in the quarter year over year, Kohl’s reported. Net sales were $3.35 billion and total revenue was $3.55 billion versus $3.53 billion and $3.73 billion, respectively, in the year-earlier period. Operating income was $279 million versus $166 million in the prior-year quarter while adjusted operating income was $161 million versus $166 million.
Kohl’s updated its full year financial outlook to include net sales down 5% to 6% versus previous guidance of 5% to 7% and a comparable sales decrease of 4% to 5% versus 4% to 6%.
Michael Bender, Kohl’s interim CEO, said in a conference call that unseasonable weather early in the second quarter dampened business particularly in seasonal categories, ultimately impacting overall results.
Kohl’s home operation saw strength in the domestic decor and bedding and bath categories, partially offset by softness in small electrics. Bender pointed out Kohl’s recently launched three new home brands, Mariana, Hotelier and Mingle and Co., to a “strong initial response” that contributed to improved performance in the bedding, bath and tabletop segments.
In announcing company results, Bender said, “Kohl’s second quarter performance is a testament to the progress we are making against our 2025 initiatives. This resulted in sales performance that came in ahead of our expectations. While it is clear that these initiatives are beginning to resonate with our customers, our team remains focused on delivering progressive improvement throughout the remainder of the year against a challenging economic backdrop. In addition to our top line progress, we managed the business with great discipline in the quarter. We were able to expand our gross margins, reduce our inventory, and lower our expenses, leading to solid second quarter earnings.”
