Kohl's Corporation (NYSE:KSS) shares surged more than 32% Tuesday after the retailer reported a third-quarter earnings beat and raised its full-year guidance, buoyed by stronger-than-expected sales.
For the quarter ended September 30, net sales fell 2.8% year-on-year to $3.4 billion, slightly above analysts’ estimate of $3.33 billion. Comparable sales decreased a milder 1.7%, compared with a projected 3.89% drop.
Adjusted earnings per share came in at $0.10, beating expectations for a loss of $0.16. Net income was $8 million, or $0.07 per diluted share, down from $22 million, or $0.20 per share, a year earlier.
Gross margins improved to 39.6%, inventory levels fell 5%, and cash flow surged to $124 million as the company streamlined operations.
CEO Michael Bender, who took the permanent CEO role in November 2023, said the results reflect progress on Kohl’s 2025 initiatives.
“These results are a direct reflection of the progress we are making against our 2025 initiatives, reinforcing our confidence as we continue to move in the right direction,” Bender said. “We are focused on building on this momentum, as we remain committed to delivering quality products, great value, and a frictionless experience to our customers in an uncertain macroeconomic environment.”
Kohl’s raised its full-year adjusted EPS guidance to $1.25 to $1.45, well above the prior consensus of $0.72. The retailer also expects operating margins of 3.1% to 3.2% and a net sales decline of 3.5% to 4% for the full year, an improvement over earlier projections.
“I am very proud of the work our team has accomplished to date, as we continue to operate our company with strong discipline, deliver solid cash flow generation, and maintain a healthy balance sheet,” Bender added. “This will serve as a strong foundation as we reposition Kohl’s for future growth.”