Kohl’s Corp.’s fourth-quarter profits declined 18.4 percent, but a greater emphasis on proprietary brands provided a recessionary bright spot.
In the three months ended Jan. 31, net income fell to $336 million, or $1.10 a diluted share — beating the Yahoo Finance analyst consensus estimate of $1.03 — from $412 million, or $1.31, in the year-ago period. Sales declined 4.6 percent, to $5.24 billion from $5.49 billion, and decreased 9.1 percent on a same-store basis. Accessories, footwear, men’s wear and children’s wear outperformed for the quarter and year, while women’s wear and home fared poorly.
President and chief executive officer Kevin Mansell said Thursday that exclusive labels such as Simply Vera by Vera Wang, Chaps, Tony Hawk, Daisy Fuentes and Fila have had “high consumer acceptance.”
The introductions of Dana Buchman, which hit stores on Presidents’ Day, and Hang Ten, slated to make its debut in 300 warm-weather stores in April, are expected to build on this success. Company executives did not rule out adding more exclusive labels, but declined to be more specific. Mansell said in the last three years the company has introduced a variety of brands and this strategy will continue, including “a couple this spring.”
“The customer responds well to new brand launches,” he said. “And we have room to grow on our exclusive brand front.”
Mansell said the penetration of exclusive and private brands grew 105 basis points in the fourth quarter to 40.3 percent of sales, “primarily due to our exclusive national brands.”
For the year, profits also fell 18.4 percent, to $885 million, or $2.89 a diluted share, from $1.08 billion, or $3.39, in 2007. Sales inched down 0.5 percent to $16.39 billion from $16.47 billion.
For the first quarter, the company expects diluted earnings per share at 27 to 34 cents, based on the assumption of a same-store sales decrease in the range of 5 to 8 percent.
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