Kohl’s Corp., exceeding expectations for both the top and bottom lines, swung into profitability during the first quarter of 2021 and raised its outlook for the year.
Net income for the quarter ended May 1 was $14 million, or $0.09 a share, compared to a loss of $541 million, or $3.52 a share, in the year-ago period.
Adjusted net income was $165 million, or $1.05 per share, compared to a loss of $495 million, or $3.22 a share, in the 2020 period.
Total revenues rose 60.1 percent to $3.89 billion from $2.43 billion in the year-ago period.
“We are very pleased with our strong start to 2021 with both sales and earnings materially exceeding expectations. Along with a favorable consumer spending backdrop, we continue to see our key strategic initiatives gain traction and resonate with customers,” said Michelle Gass, Kohl’s chief executive officer.
“We saw momentum build through the quarter, especially in our stores where we continue to elevate the experience,” added Gass. “We are eagerly preparing for the upcoming launch of our Sephora partnership as well as the introduction of several new exciting brands this fall.”
Kohl’s will also be adding Tommy Hilfiger merchandise to its assortment in the fall, joining the growing list of big brand names the retailer has already added recently including Lands’ End, Cole Haan, Calvin Klein, Eddie Bauer and Toms. Kohl’s has been striving to build a reputation as a dominant destination for active, casual and beauty products.
“We are positioned to capitalize on growth opportunities during the balance of 2021 and remain firmly on track to achieving our 2023 strategic goals. Based on our first-quarter results, we are raising our full-year 2021 guidance,” Gass said.
Other retailers this week have also reported strong first-quarter results, fueled by the government stimulus, the rollout of COVID-19 vaccines, and some pent-up demand. Target saw big gains in sales and profits during the quarter, with particularly strong store traffic. Macy’s first quarter was marked by better-than-expected top- and bottom-line results and a swing to profitability, and Walmart’s results were buoyed by strong consumer demand for essentials including groceries and categories spurred by pandemic-related shopping habits.
At Kohl’s, net sales this year are now expected to increase in the mid-to-high teens percentage range compared to the previous expectation of a mid-teens percentage rate increase.
Operating margin is now expected to be in the range of 5.7 percent to 6.1 percent compared to the previous expectation of 4.5 percent to 5 percent. And adjusted earnings per share are now expected to be in the range of $3.80 to $4.20, excluding any non-recurring charges, compared to the previous expectation of $2.45 to $2.95.
Earlier this month, Kohl’s entered into an agreement with activist investors whereby two independent directors nominated by the activist group — Margaret Jenkins and Thomas Kingsbury — joined the board. An additional independent director identified by Kohl’s and agreed to by the investor group, Christine Day, also joined the board.