Investors applauded signs of bottom line momentum and strength headed into the holidays at Kohl’s Corp., driving the company’s stock up 11.5 percent to $50.96 after third-quarter profits topped projections.
The retailer’s third-quarter net income increased 21.7 percent to $146 million, or 83 cents a diluted share, from $120 million, or 63 cents, a year earlier.
Adjusted earnings of 83 cents a share came in well ahead of the 70 cents analysts projected.
Kevin Mansell, chairman, chief executive officer and president, said the company did an “excellent job managing inventory” and also controlled expenses well.
Sales for the three months ended Oct. 29 slipped 2.3 percent to $4.33 billion from $4.43 billion as comparable-store sales fell 1.7 percent.
On a conference call with analysts, Mansell said, “I’m happy to say we ended the quarter strongly in October and saw progressive sequential improvement throughout the month… The month of October ended basically flat to last year, which is encouraging as we enter the holiday season.”
Men’s was the company’s strongest business category, with strength in active and tailored looks.
“Women’s was slightly below the company but had continued strength in juniors, driven by our speed initiative as well as strength in Sonoma and other key proprietary brands,” the ceo said. “Overall, our women’s business is beginning to get traction from our speed initiative in several of our key proprietary brands. I would expect this to grow in impact as we go through the holiday and into the spring season.”
For the year, Kohl’s is looking for adjusted earnings per share of $3.80 to $4, opening up some potential upside to the $3.87 analysts projected.
Mansell said: “We’re very well positioned for the upcoming holiday season. We have momentum coming out of October. We have considerable newness in our stores and online assortments. Given our much lower inventory position, we’ve created a more appealing selling environment in our stores and we can deliver a substantial amount of new transitional product across the company as we move through the holiday season. Whether she shops in one of our stores or online, whether she chooses to have her merchandise delivered or pick it up herself, we’re committed to providing our customer with a convenient and value-driven experience.”