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Kohl's (KSS) Q2 Loss Narrower-Than-Expected, Sales Fall

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Kohl's Corporation (KSS - Free Report) posted second-quarter fiscal 2020 results, with narrower-than-expected loss. Moreover, the company’s top line surpassed the Zacks Consensus Estimate. However, the metric declined from the year-ago period.

To address challenges tied to the pandemic, Kohl's focused on lowering expenses, managing inventory receipts and augmenting its online business. The company took every initiative to safeguard its financial position amid the crisis that helped generate positive operating cash flow. Also, management informed that it has reopened all stores as coronavirus-induced restrictions are being lifted.

Shares of this Zacks Rank #4 (Sell) company have slumped 52.1% on a year-to-date basis compared with the industry’s decline of 54.6%.

 

Q2 in Details

Kohl's posted adjusted loss of 25 cents per share, which is narrower than the Zacks Consensus Estimate of a loss of 92 cents. However, the figure was wider than adjusted earnings of $1.55 per share reported in the year-ago quarter. The deterioration was caused by lower net sales and increased interest expenses.

Total revenues came in at $3,407 million, down 23.1% from the prior-year quarter’s levels. Nevertheless, the metric surpassed the Zacks Consensus Estimate of $3,172.5 million. Net sales have plunged 22.9% to $3,213 million and other revenues declined 25.7% to $194 million in the quarter.

Gross margin contracted to 33.1% in the quarter under review from 38.8% in the year-ago quarter. Notably, SG&A expenses declined 17.3% year over year to $1,050 million. However, as a percentage of total revenues, SG&A expenses increased to 30.8% in the quarter from 28.6% in the prior-year quarter. The company reported operating income of $118 million compared with $376 million posted in the prior-year quarter.

Kohls Corporation Price, Consensus and EPS Surprise

Kohls Corporation Price, Consensus and EPS Surprise

Kohls Corporation price-consensus-eps-surprise-chart | Kohls Corporation Quote

Other Financial Details

Kohl’s ended the quarter with cash and cash equivalents of $2,428 million, long-term debt of $3,450 million and shareholders’ equity of $4,837 million. The company generated net cash from operating activities of $304 million during six months ended Aug 1.

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