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Headquartered in Menomonee Falls, WI, Kohl’s Corp (KSS - Free Report) operates about 1,100 stores across 49 states and an e-commerce site. Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell).
Weak Guidance Reflects Rising Challenges
Earlier this month, the retailer reported that their comparable sales decreased 2.1% year-over-year in the months of November and December 2016 combined.
“Sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December,” said the CEO.
They also cut their FY 2016 earnings guidance to $2.92 to $2.97 per share from $3.12 to $3.32 per share. The stock plunged about 19% after the report.
The guidance reflected rising challenges for the industry that is struggling with dwindling foot traffic at stores and continuing transition to online shopping.
Falling Estimates
Analysts have slashed their estimates for the company after weak guidance. Zacks Consensus Estimates for the current and next fiscal year have fallen to $3.64 per share and $3.84 per share from $3.93 and $4.21 respectively, before the report.
Kohl's Corporation Price, Consensus and EPS Surprise
In addition to disappointing mall traffic, the retail space is going through a shift toward online shopping. With tightening labor markets, wage pressure has also started hurting retailers. It remains to be seen whether retailers like Kohl’s will be able to reorganize their operations and improve their profitability going forward.
Further, the industry “Retail - Regional Department Stores” is currently ranked 245 out of 265 Zacks industries (bottom 8%), suggesting potential underperformance in the short-to-medium term. There is no Zacks Rank #1 or #2 stock in the industry. It would be better for investors to stay away from this stock and the industry in view of rising challenges.
So Where Are the Profitable Trades?
Be sure to short or avoid this Bear Stock of the Day. Now would you like to see Zacks' recommendations that have the best profit potential? Starting today, for the next month, you can follow all our private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks trades >>
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Bear of the Day: Kohl's (KSS)
Headquartered in Menomonee Falls, WI, Kohl’s Corp (KSS - Free Report) operates about 1,100 stores across 49 states and an e-commerce site. Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell).
Weak Guidance Reflects Rising Challenges
Earlier this month, the retailer reported that their comparable sales decreased 2.1% year-over-year in the months of November and December 2016 combined.
“Sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December,” said the CEO.
They also cut their FY 2016 earnings guidance to $2.92 to $2.97 per share from $3.12 to $3.32 per share. The stock plunged about 19% after the report.
The guidance reflected rising challenges for the industry that is struggling with dwindling foot traffic at stores and continuing transition to online shopping.
Falling Estimates
Analysts have slashed their estimates for the company after weak guidance. Zacks Consensus Estimates for the current and next fiscal year have fallen to $3.64 per share and $3.84 per share from $3.93 and $4.21 respectively, before the report.
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation Price, Consensus and EPS Surprise | Kohl's Corporation Quote
The Bottom Line
In addition to disappointing mall traffic, the retail space is going through a shift toward online shopping. With tightening labor markets, wage pressure has also started hurting retailers. It remains to be seen whether retailers like Kohl’s will be able to reorganize their operations and improve their profitability going forward.
Further, the industry “Retail - Regional Department Stores” is currently ranked 245 out of 265 Zacks industries (bottom 8%), suggesting potential underperformance in the short-to-medium term. There is no Zacks Rank #1 or #2 stock in the industry. It would be better for investors to stay away from this stock and the industry in view of rising challenges.
So Where Are the Profitable Trades?
Be sure to short or avoid this Bear Stock of the Day. Now would you like to see Zacks' recommendations that have the best profit potential? Starting today, for the next month, you can follow all our private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks trades >>