• Q1 profit declines 15% to $125m
  • Sales fall 3.1% to $4.70bn
  • Gross margin improves 40 basis points

US department store retailer Kohl's said it is "encouraged" by the improvement it saw during the first-quarter, despite booking a decline in earnings and sales.

Net income came to US$125m during the three months to 3 May, compared to $147m in the same period of the prior year.

Net sales slipped 3.1% to $4.70bn from $4.20bn last year, while comparable store sales fell 3.4%. But gross margin improved 40 basis points to 36.8%.

Kohl's ended the quarter with 1,160 stores, compared with 1,155 stores a year ago. The company opened four new stores, relocated one, and closed two stores during the quarter.

"We did not achieve our first quarter sales goals, but we were encouraged by the improvement in sales as the quarter progressed," said chairman, president and CEO Kevin Mansell.

"Our teams managed our inventory levels appropriately and expenses were controlled throughout the organisation during the quarter."