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A Bullish Earnings Update Boosts Kohl's StockA Bullish Earnings Update Boosts Kohl's StockRivas, Teresa.Barron's (Online); New York Kohl's stock is jumping 8% on Thursday after the department store provided a rosy fourth-quarter earnings update—even though sales look a bit light. Kohl's (ticker: KSS) said it expects earnings per share of $1 to $1.05 for the period, on an 10% decline in revenue year over year, which would equate to roughly $5.88 billion. Analysts are forecasting EPS of 70 cents on revenue of $5.93 billion. The company sees same-store sales falling 11%; consensus calls for an 8.4% decline. Kohl's attributed its better-than-expected EPS to stronger gross margins and cost controls. It's slated to report full fourth-quarter results before the bell on March 2. Kohl's is up 8%, at $50.37, in recent trading, while the S&P 500 is up 0.7%. The shares have gained nearly 24% since the start of the year and 12% in the past 12 months. The update is a good one for the company, especially as it reflects a good showing during the key holiday shopping period. Kohl's bottom line looks like it will come in much higher than anticipated, while sales didn't miss the mark too widely. Moreover, while comparable sales may not have rebounded as much as expected, it's the third straight quarter that the metric improved sequentially: In its previous quarter, same-store sales were off a worse-than-expected 13.3%. The news is the latest in a string of positive headlines for Kohl's. The shares scored an upgrade from Cowen on Wednesday, and other analysts have also been turning more bullish on Kohl's, with many pointing to potential upside from the company's recently announced beauty partnership with LVMH Moët Hennessy-Louis Vuitton's (LVMH.Italy) Sephora chain. Although the Covid-19 pandemic hit department stores hard, Kohl's has long had an advantage in its off-mall network of stores, and its agreement to handle returns from Amazon.com (AMZN) helps bring in shoppers. Moreover, as Barron's previously noted, with many of the weakest department stores gone, survivors like Kohl's could emerge in a stronger position . |
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