Soft home a bright spot for Kohl's Q1
Menomonee Falls, Wis. – Kohl’s saw income slip for the first quarter as a result of lower sales and higher operating expenses.
The company today reported results for the quarter ended May 3. Income was $125 million, a drop of 15% compared to $147 million in the year-ago quarter. Earnings per share were $.60, down 9% from the prior year quarter. Sales dipped 3.1% from a year-ago to $4.07 billion.
Comps store sales fell 3.4% in the first quarter, compared to a decline of 1.9% in the prior-year quarter and a 2.0% decline in the previous quarter. Soft home was the best performing category in total home.
The company said poor weather, such as the ice storms that hit the U.S. in the first quarter, forced store closures and limited shopping, impacting sales.
“We did not achieve our first quarter sales goals, but we were encouraged by the improvement in sales as the quarter progressed. Our teams managed our inventory levels appropriately and expenses were controlled throughout the organization during the quarter,” said Kevin Mansell, Kohl's chairman, president and ceo.
On the earnings conference call, Mansell said, “We are pleased with the results we’re seeing in national brands.” The company began putting an emphasis on national brands last year, and while it is reducing its private brands, it is not completely abandoning them either, he said. “Our customer recognizes the value these provide.”
Concurrent with the quarterly earnings report, The Wall Street Journal reported that Kohl's is planning some personnel changes in anticipation of grooming a successor for its current ceo. The company has seen several high level executives leave recently, including its chief administrative officer last year.
On the earnings call, Mansell said, “We’ve built a new leadership team over the past year and a half, driven by the need to drive better results.” The remaining role to fill is chief merchandising office, which he said will be filled externally.
Kohl’s ended the quarter with 1,160 stores in 49 states, compared with 1,155 stores at the same time last year. The company opened four new store locations, relocated one existing store and permanently closed two stores during the first quarter of 2014.
In addition, Kohl’s said it has extended its current credit card agreement with Capital One for an additional five years until March 31, 2023.
Looking ahead, Kohl’s maintained its guidance for fiscal 2014. The company expects earnings in the range of $4.05 to $4.45 per share, sales growth in the range of 0.5–2.5% and comparable store sales growth in the range of 0–2%.
Source: Home & Textiles Today