Kohl's shares rise after retailer posts better-than-expected earnings, sees sales growth in 2021

Customers leave a Kohl’s store on November 12, 2015 in San Rafael, California.

Justin Sullivan | Getty Images News | Getty Images

Kohl’s on Tuesday reported fourth-quarter earnings and sales that topped analysts’ estimates, and pointed to stronger growth in 2021.

Facing pressure from activist investors, the company said it will reinstate its dividend and buy back shares.

With its sales strained by the pandemic, Kohl’s has been working to drive more shoppers online, and add brands that sell home accessories, fitness gear and makeup to lure new customers. It’s also been trying to cut costs and trim inventories, and these efforts have helped improve profits.

“After an extraordinary year managing through the pandemic, we ended the year in a very solid financial position, and we enter 2021 with strong momentum,” Chief Executive Michelle Gass said in a statement.

Kohl’s shares were up more than 1% in premarket trading.

Here’s how the company did during the quarter ended Jan. 30 compared with what analysts were expecting, using a Refinitiv survey:

  • Earnings per share: $2.22 adjusted vs. $1.01 expected
  • Revenue: $5.88 billion vs. $5.86 billion expected

Kohl’s reported net income of $343 million, or $2.20 per share, compared with $265 million, or $1.72 a share, a year earlier. Excluding one-time charges, the company earned $2.22 per share, topping the $1.01 forecast by analysts.

Sales fell to $5.88 billion from $6.54 billion a year earlier, topping the $5.86 billion forecast by analysts.

Online sales jumped 22% from a year earlier and accounted for 42% of its total sales.

The company expects sales to rise by a mid-teens percentage this year. Analysts, on average, expected sales growth of 17.5%, or $17.64 billion, this year, according to Refinitiv. It forecast adjusted earnings to be in a range of $2.45 to $2.95 per share for 2021, largely in line with expectations of $2.67 a share.

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Last week, Kohl’s rejected an investor group’s attempt to seize control of its board. The retailer has argued it would disrupt the momentum it has had in revamping its business. The group, which consists of Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital, owns a 9.5% stake.

On Tuesday, Kohl’s said it would spend between $200 million to $300 million on share repurchases this year. It said it plans to invest at least $550 million in capital expenditures, with some of that money going toward the debut of hundreds of mini Sephora shops in its stores, and opening its sixth U.S. e-commerce fulfillment center.

Late last month, Kohl’s said its board declared a dividend payment of 25 cents per share.

Kohl’s shares are up about 45% over the past 12 months, as of Monday’s market close. The retailer has a market cap of $8.99 billion, which has grown to be bigger than Nordstrom‘s and Macy’s.

Find the full press release from Kohl’s here.


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