Kohl's beats holiday-quarter profit estimates, thanks to Amazon tie-up
Mar 3, 2020
Kohl’s Corp beat Wall Street estimates for quarterly profit on Tuesday as partnerships with online retail giant Amazon.com and others brought in more shoppers to its stores, sending the department store chain’s shares up 7%.
Under its partnership with Amazon.com Inc, the retailer accepts returns of orders made online. It has also tied up with fitness center operator Planet Fitness Inc to open workout centers near some stores.
The chain is battling competition from off-price and online retailers, as well as traditional retailers like Target and Nordstrom.
“We are encouraged by the acceleration of traffic and new customer acquisition in our stores and online driven by the unprecedented level of new brands and partnerships,” Chief Executive Officer Michelle Gass said.
The company, however, forecast 2020 earnings largely below Wall Street estimates, hurt by lower margins as it offers heavy discounts to bring in shoppers.
It expects earnings between $4.20 per share and $4.60 per share for fiscal 2020. Gross margin is expected to fall 10-20 basis points from last year.
Analysts were expecting a profit $4.59 per share, according to IBES data from Refinitiv.
For the fourth quarter, Kohl’s reported flat comparable sales, beating the average estimate of 0.11% fall.
Excluding one-time items, the company earned $1.99 per share, beating the estimate of $1.88.
Net income fell to $265 million, or $1.72 per share, from $272 million, or $1.67 per share, a year earlier.
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