Kohl's Doesn't Stand Up to Macy's (KSS, M)

The earnings report from Kohl’s Corporation (NYSE: KSS) was partly like the Macy’s Inc. (NYSE: M) report yesterday, but the outlook from Kohl’s leaves a simple observation:  Macy’s is taking share from Kohl’s.  That is the verdict from the stock trading at any rate.

The department store chain beat earnings this morning at $0.84 EPS vs. $0.82 expected from Thomson Reuters.  Revenues were up 7.7% to $4.1 billion, effectively in-line with the $4.09 billion expected.  Same store sales rose 4.6%.

It is the next quarter guidance where things get cloudy at Kohl’s as it sees $0.57 to $0.63 EPS versus an estimate of $0.74 EPS from Thomson Reuters.  It sees revenues rising 4.5% to 6.5% from a year before to $4.23 to $4.31 billion, mostly in-line with $4.29 billion expected from Thomson Reuters.  Kohl’s also sees same-store sales up 2% to 4% for the quarter.  This sounds like over-promotion being the kicker with discounting.

The end of year quarter is seen at $1.51 to $1.59 EPS versus $1.57 EPS expected from Thomson Reuters.  Revenues were projected up 4.5% to 6.5% to roughly $5.94 billion to $6.05 billion versus Thomson Reuters consensus estimates.  It sees same-store sales being up 2% to up 4%.

Macy’s managed to close up by $1.14 at $20.52 yesterday despite the triple-digit DJIA losses.  Kohl’s fell $0.65 to $47.78 yesterday with the broader market and shares are down another $1.50 to $46.28 in pre-market trading.

JON C. OGG