KSS – Kohl’s Drops Hard on Awful Earnings

by Robert Martin | November 14, 2013 9:55 am

Looks like the back-to-school season wasn’t so kind to Kohl’s (KSS[1]) in the third quarter. KSS stock was plummeting — down 7% — early Thursday after after Kohl’s earnings were released.

kss stock kohl's earnings[2]Kohl’s earnings came in at 81 cents per share, missing expectations by 5 cents. KSS also showed declines in same-store sales (-1.6%) and total revenues (-1%).

Last quarter, KSS lowered guidance for Q3 and for the second half of the year, expecting Q3 earnings for KSS stock to be in the range of 83 cents-92 cents per share on sales growth of 1%-3%, but Kohl’s earnings and revenues failed to hurdle even that low bar.

Unfortunately for KSS, the outlook doesn’t look good from here on out. Although KSS has opened 12 new stores since Q3 2012, the falling sales figures have the company on alert, prompting lowered KSS earnings guidance for the fiscal year yet again — this time, from a range of $4.15-$4.35 to $4.08-$4.23.

Leading up to the report, analysts at UBS and Jefferies Group had increased their price targets for KSS stock to $69 and $67 respectively. Shares had been trending up following positive commentary on KSS stock in Barron’s[3] in the Oct. 28 edition, which mentioned shareholder-friendly policies and a new chief customer officer from Starbucks (SBUX[4]) as  big positives for the company.

But for now, shareholders should not “expect great things” from KSS … and much of the rest of the retail sector. Although Macy’s (M[5]) released positive earnings yesterday[6] and ended the day up 9%, Walmart was sliding on its own mixed report[7], and JCPenney (JCP[8]) could provide more negative gunpowder when it releases earnings next week.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.

  1. KSS: http://studio-5.financialcontent.com/investplace/quote?Symbol=KSS
  2. [Image]: https://investorplace.com/wp-content/uploads/2010/10/KohlsLogo.jpg
  3. positive commentary on KSS stock in Barron’s: http://online.barrons.com/article/SB50001424053111904897104579149563981361616.html#articleTabs_article%3D1
  4. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  5. M: http://studio-5.financialcontent.com/investplace/quote?Symbol=M
  6. released positive earnings yesterday: https://investorplace.com/2013/11/macys-stock-earnings-m/
  7. on its own mixed report: https://investorplace.com/2013/11/walmart-earnings-wmt-stock/
  8. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP

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