Department store retailer Kohl's Corporation is planning conservatively for 2008 after posting flat net income levels for fiscal 2007.

The US company reported a fall in net income in its fourth quarter to US$411.7m from $484.6m a year before. Net sales edged up 0.7% to $5.5bn, but comparable store sales fell 4%.

Full-year net income was flat at $1.1bn, with net sales up 5.6% to $16.5bn.

Company chairman and CEO Larry Montgomery said Kohl's had not been immune to the tough conditions experienced by other retailers in the US.

But he added: "Despite a challenging year which saw deep discounts across the industry, our gross margin increased over the prior year as a result of improved inventory management and increased penetration from our private and exclusive brands."

Kohl's expects to open 70-75 new stores in fiscal 2008, with 28 new stores opening this spring.

The company expects earnings per diluted share of $3.15-3.50 for the year, based on a projected sales increase of 5-8% and comparable store sales falls of 0-3%.

In the first quarter, it expects earnings per diluted share of $0.50-0.54.

"We expect 2008 to be a challenging year from a macro-economic perspective," said Montgomery. "We are planning conservatively in our sales expectations, inventory levels and expenses."