• US department store retailer Kohl's has reported "stronger than expected" holiday sales.
  • Total and comparable sales for November and December 2017 combined increased 6.9% on the same period last year.
  • Kohl's now expects fiscal 2017 diluted earnings per share to be $4.10 to $4.20 versus its previous guidance of $3.72 to $3.92.

Like other department store groups, Kohl's has further work to do in the year ahead, but according to one analyst, its positive sale growth over the key holiday trading seasons signals it is firmly on the right track.

Today (8 January), the US department store retailer reported that its total and comparable sales for November and December 2017 combined increased 6.9% on the same period last year.

"We are very pleased with our holiday period sales, which were consistently strong through November and December," said CEO Kevin Mansell. "All lines of business and all regions reported positive comp sales.  As expected, growth in digital demand accelerated significantly in the holiday period from the year-to-date trend.  In addition, we experienced positive sales in our stores driven by stronger traffic."

On the back of what it called the "stronger than expected" holiday sales and expectations for fiscal January, Kohl's now expects its fiscal 2017 diluted earnings per share to be in the range of $4.10 to $4.20 versus its previous guidance of $3.72 to $3.92.

Meanwhile, fiscal 2017 gross margin is forecast to be higher than the prior year and its SG&A, including the 53rd week, to increase at the high end of its prior guidance of 0.5%-2%.

Neil Saunders, managing director of GlobalData Retail, notes that after good updates from both Macy's and JC Penney, Kohl's positive sales growth comes as no surprise. "However, the extent of the increase is impressive and suggests that Kohl's grew its market share over the holiday season," he adds. "In our view, the 6.9% uplift in comparables puts Kohl's firmly in the winner's enclosure."

While Saunders admits that growth comes off the back of a weak prior year, when comparables declined by 2.1%, GlobalData believes Kohl's performance demonstrates that many of the initiatives undertaken over the past year are now paying off.

He adds: "Among these are the improvements in the in-store offer, with the thinning out of the range and the incorporation of more branded products both helping to boost footfall and conversion rates over the holidays. Some of the more radical steps, such as allowing Amazon returns in some stores and the introduction of Amazon shop-in-shops also paid dividends.

"Away from stores, digital was the star of the show and was the underpinning of Kohl's better numbers. Again, the presence of branded products helped to drive traffic to the website. Omnichannel services, like collect in store, were also highly valued by customers seeking convenience over the holiday period.

"Like other department store groups, Kohl's has further work to do in the year ahead. However, these numbers signal it is firmly on the right track."