US: Kohl's Q4 earnings slide
- Q4 net profit slides 12%
- Sales down 3.8%
E-commerce expenses led to higher than expected costs for the quarter
US department store operator Kohl's has recorded a drop in fourth-quarter earnings on the back of costs related to its e-commerce business.
In the three months ended 1 February, net profit slid 12% to US$334m. Unanticipated expenses in servicing its e-commerce business led to higher than expected costs for the quarter.
Sales were down 3.8% to $6.1bn as a result of lower traffic and low levels of clearance merchandise.
Based on assumptions of total sales increases of 0.5% to 2.5% and comparable sales increases of 0 to 2%, the company said it expects full-year earnings per diluted share of $4.05 to $4.45.
UBS analyst Michael Binetti said the results were largely in line with consensus. The key NT driver for Kohl stock will be updates on progress in key strategic initiatives (reducing inventory/store by -MSD per store/year, increasing mix of national brands, reducing private brands, new e-commerce initiatives like store to door, non-credit card rewards program roll out).
"Like the peer group, we expect to hear about weather-hindered negative sales through Valentine's Day that have turned positive in late-February."
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