Menomonee Falls, Wisc.-based Kohl’s Corp. on Thursday reported a 10 percent increase in net income in the fourth quarter ended Jan. 31, to $369 million or $1.83 a share, from $334 million or $1.56 a share in 2014. The results beat Wall Street’s average estimate of $1.80 a share for the quarter.
Total sales in the quarter advanced 3.9 percent to $6.3 billion from $6.1 billion in the prior year’s fourth quarter. Comparable store sales, which fell 2 percent in the fourth quarter of 2014, grew 3.7 percent in the current quarter, driven by both transactions per store — a key area of focus for the company — and average transaction value. There was sales strength across all areas of the store and all geographic regions experienced high sales, the company said.
Kohl’s is expecting earnings per share of $4.40 to $4.50 for fiscal 2015, based on a total sales increase of 1.8 percent to 2.8 percent. The company projected comp-store sales to grow between 1.5 percent and 2.5 percent. Kohl’s plans to repurchase $1 billion worth of shares at an average price of $70 per share and pegged capital expenditures at $800 million.
Kevin Mansell, Kohl’s chairman and chief executive officer, said during a conference call with analysts that the company’s previously announced emphasis on national brands paid dividends in the quarter, driving higher comps than private and exclusive brands. Sales of Nike, the top performer rose 24 percent, while Levi’s Carter and Fila Sport each gained 10 percent.
Kohl’s has been investing in beauty, installing a new beauty format in 500 stores last year and expanding that to 900 units in 2015. Mansell said Kohl’s will launch Bliss skin care and body products in March in stores and on Kohl’s.com.
In response to a question about associate wages, Mansell didn’t provide any specifics about pay. “We have a pretty robust and successful system in place to assess the competitive market. We pay what’s necessary to attract and retain people. The cost of living is different in different parts of the country. I realize that wages are getting a lot of focus, but while they’re important, there are a lot of other factors that drive a decision of where to work.”