MILWAUKEE — Kohl’s Corp. chairman and chief executive officer Kevin Mansell told shareholders at the retailer’s annual meeting here that the company “fell short” of objectives in 2011, but emphasized high rankings from shopper surveys and gains in Internet sales.
“We were outperformed by some competition,” Mansell said of the company’s financial results. “Not to say there weren’t successes.”
Kohl’s remodeled stores, improved its online experience for shoppers, reached its goal of $1 billion in online sales, opened a new fulfillment center and successfully launched Jennifer Lopez and Marc Anthony fashion lines, Mansell said.
In a conference call with analysts earlier in the day, Mansell said the company’s own execution was to blame for lagging sales in the first quarter.
He declined to speculate on whether J.C. Penney Co. Inc.’s new “fair and square” pricing strategy took sales from Kohl’s, saying he would need to see Penney’s first-quarter results, due out next week, before making a judgment.
Specialty stores did a much better job with the color denim trend in the first quarter, Mansell said on the call.
“There’s no way we had anywhere near enough depth on it,” he said.
The ceo also said the March heat wave drove such strong sales of seasonal goods that there was an inventory shortage in April.
Kohl’s on Thursday reported a 23.4 percent decrease in net income for the first quarter ended April 28, to $154 million, or 63 cents a diluted share, from $201 million, or 69 cents, a year earlier. Sales were up 1.9 percent, to $4.24 billion, while comparable-store sales increased 0.2 percent for the quarter.
Price cuts needed to drive sales were to blame for lower gross margins, the firm noted.
The company also said Thursday that it is testing a new store prototype that introduces furniture and lamps — items Kohl’s has been selling on its Web site. Test stores are located in Atlanta, Houston and Salt Lake City.
The furniture departments took over space from the children’s clothing department, chief financial officer Wes McDonald said during the call. The goal, he said, is to increase sales per square foot by $10 to $230.
Shareholders at the meeting soundly rejected — with only 3 percent in favor — a proposal from the Humane Society of the United States encouraging Kohl’s to develop a policy prohibiting the sale of animal fur in its stores. A shareholder proposal mandating that Kohl’s board make public its executive succession plan and another that would have required executives to retain their stock for a period of time after leaving the company also were rejected.
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