US: Kohl's Q1 profit hit by price cuts
- Q1 net income declined 23.3% to US$154m
- Net sales rose 1.9% to $4.2bn
- Comparable store sales increased 0.2%
US department store operator Kohl's has reported a decline in first-quarter net income as gross margin was hit by price cuts designed to lure in more customers.
The retailer saw net income decline 23.3% over the quarter ended 28 April to US$154m. Net sales rose 1.9% over the quarter to $4.2bn, while comparable store sales increased 0.2%. Gross margin fell to 35.9% from 38.1% in the same quarter of the prior year.
"Our first quarter results reflect the implementation of our strategy to initiate lower pricing in order to provide greater value to our customers," said chairman, president and CEO Kevin Mansell.
"This planned action led to significantly lower gross margins for the quarter. Strong management of expenses allowed us to achieve our earnings goal for the quarter.
"We have accelerated new receipts into second quarter to ensure we are well-positioned from an inventory perspective for the back-to-school season. The combination of these two actions should allow us to greatly improve our sales for the fall season."
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