What to Look for in Kohl’s Earnings

Kohl’s Corp. (NYSE: KSS) is scheduled to report its fiscal fourth-quarter financial results before the markets open on Thursday. Thomson Reuters consensus estimates are calling for $1.56 in earnings per share (EPS) on $6.39 billion in revenue. The same period from the previous year had $.183 in EPS on $6.34 billion in revenue.

The stock slid earlier this month when the company gave an update on its holiday sales. Kohl’s reported that fourth-quarter comparable sales increased 0.4% and fiscal 2015 comparable sales increased 0.7%. Total sales increased 0.8% for the fourth quarter and 1.0% for fiscal 2015.

The company now expects its fiscal 2015 diluted earnings per share (EPS) to be $3.95 to $4.00, down from its previously stated guidance of toward the low end of $4.40 to $4.60. Consensus estimates call for $4.30 in EPS on $19.27 billion in revenue for this fiscal year.

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The change in guidance is a result of lower than planned sales for the quarter and significantly lower than planned gross margin. Gross margin was affected by the origin and timing of the sales, in addition to the competitive promotional environment, which resulted in higher-than-expected markdowns on both year-round and seasonal merchandise.

From the business perspective, Footwear and Home were the strongest categories, while Accessories was the weakest. On a regional basis, the West region was the strongest while the Mid-Atlantic and South Central regions were the most difficult.

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A few analysts weighed in on Kohl’s ahead of the earnings report:

• Atlantic Equities downgraded to an Underweight rating.
• Nomura has a Buy rating but lowered its price target to $52 from $62.
• Goldman Sachs lowered its price target to $40 from $42.
• JPMorgan lowered its price target to $45 from $50.

So far in 2016 Kohl’s has underperformed the broad markets with the stock down nearly 6%. Over the past 52-weeks the stock has dropped almost 34%.

Shares of Kohl’s were last trading up 0.6% at $45.21, with a consensus analyst price target of $47.71 and a 52-week trading range of $39.23 to $79.60.