We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Sturdy Comps Drive Kohl's (KSS) This Earnings Season?
Read MoreHide Full Article
Kohl's Corporation (KSS - Free Report) is slated to release second-quarter fiscal 2017 results on Aug 21. This renowned departmental store retailer’s bottom line has outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 9.4%. Let's see what's in store for the company this time around.
Efforts to Attract Traffic
Kohl's has been benefitting from positive comps since the past three quarters. Comps increased 3.6% during first-quarter fiscal 2018, following a rise of 6.3% and 0.1% in the fourth and the third quarters of fiscal 2017, respectively. Strong comps indicate that the company’s strategic initiative — Greatness Agenda — has been yielding. The initiative, which commenced in first-quarter fiscal 2014, was designed to drive transactions per store and sales.
Additionally, Kohl's partnership with Amazon (AMZN - Free Report) is expected to boost traffic. Kohl's has been accepting returns from Amazon’s customers on select products and provides free packing and shipping services for the merchandise to Amazon’s fulfillment centers. This move followed the company’s decision to sell Amazon devices, accessories and smart home devices in some of its stores in Los Angeles and Chicago. Additionally, Kohl’s recent partnership with Aldi to expected to boost store performance. In addition to driving footfall, such partnerships enable the productive utilization of store space and gain from collaborations with renowned retailers.
Apart from such initiatives, Kohl's stores have also been gaining from a rich portfolio of prominent brands. The company showcases brands like Nike (NKE - Free Report) , Adidas (ADDYY - Free Report) , Levi’s and Reebok. Exclusive brands such as Simply Vera by fashion designer Vera Wang and Chaps by Polo Ralph Lauren have attracted customers to stores in the past, courtesy of their exclusivity. Private brands like Jennifer Lopez, Rock & Republic and Van Heusen have been faring well. In line with its strategy to draw customers, especially millennials, Kohl's launched POPSUGAR fresh apparel collection in stores. Additionally, the company has been expanding in the toys category. Needless to say, such well-chalked efforts are likely to continue bolstering the top line.
Kohl's Corporation Price, Consensus and EPS Surprise
E-commerce & Inventory Reduction Efforts Bode Well
The company has experienced significant growth in the e-commerce business since the last few years. Markedly, online sales improved 20% year over year during the first quarter. To improve online offerings, the company has been expanding e-commerce fulfillment centers. Additionally, it focuses on strengthening in-store pickups. The company’s focus on technology improvements and omni-channel expansion are expected to have a positive impact on online sales.
Along with efforts to enhance sales, Kohl’s focuses on boosting margins and bottom-line performance through inventory reductions. In fact, such efforts led to per store inventory reductions of 7% and also aided gross margin growth during the first quarter. Progressing on such lines, the company’s speed and localization initiatives have been facilitating improved inventory management.
Favorable Estimates
Overall, we are impressed with the company’s past performance backed by robust strategies to augment top- and bottom-line performances. In fact, such efforts are expected to help the company offset the negative impacts of rising SG&A expenses.
Incidentally, the current Zacks Consensus Estimate for earnings for the quarter under review is pegged at $1.65, which shows a 33% jump from $1.24 cents recorded in the year-ago quarter. The estimate inched up by 2 cents over the past 30 days. Further, the Zacks Consensus Estimate for revenues is pegged at $4,442 million, reflecting a rise of almost 7% from the year-ago quarter’s figure.
What Does the Zacks Model Predict?
However, our proven model doesn’t show that Kohl’s is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Will Sturdy Comps Drive Kohl's (KSS) This Earnings Season?
Kohl's Corporation (KSS - Free Report) is slated to release second-quarter fiscal 2017 results on Aug 21. This renowned departmental store retailer’s bottom line has outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 9.4%. Let's see what's in store for the company this time around.
Efforts to Attract Traffic
Kohl's has been benefitting from positive comps since the past three quarters. Comps increased 3.6% during first-quarter fiscal 2018, following a rise of 6.3% and 0.1% in the fourth and the third quarters of fiscal 2017, respectively. Strong comps indicate that the company’s strategic initiative — Greatness Agenda — has been yielding. The initiative, which commenced in first-quarter fiscal 2014, was designed to drive transactions per store and sales.
Additionally, Kohl's partnership with Amazon (AMZN - Free Report) is expected to boost traffic. Kohl's has been accepting returns from Amazon’s customers on select products and provides free packing and shipping services for the merchandise to Amazon’s fulfillment centers. This move followed the company’s decision to sell Amazon devices, accessories and smart home devices in some of its stores in Los Angeles and Chicago. Additionally, Kohl’s recent partnership with Aldi to expected to boost store performance. In addition to driving footfall, such partnerships enable the productive utilization of store space and gain from collaborations with renowned retailers.
Apart from such initiatives, Kohl's stores have also been gaining from a rich portfolio of prominent brands. The company showcases brands like Nike (NKE - Free Report) , Adidas (ADDYY - Free Report) , Levi’s and Reebok. Exclusive brands such as Simply Vera by fashion designer Vera Wang and Chaps by Polo Ralph Lauren have attracted customers to stores in the past, courtesy of their exclusivity. Private brands like Jennifer Lopez, Rock & Republic and Van Heusen have been faring well. In line with its strategy to draw customers, especially millennials, Kohl's launched POPSUGAR fresh apparel collection in stores. Additionally, the company has been expanding in the toys category. Needless to say, such well-chalked efforts are likely to continue bolstering the top line.
Kohl's Corporation Price, Consensus and EPS Surprise
Kohl's Corporation Price, Consensus and EPS Surprise | Kohl's Corporation Quote
E-commerce & Inventory Reduction Efforts Bode Well
The company has experienced significant growth in the e-commerce business since the last few years. Markedly, online sales improved 20% year over year during the first quarter. To improve online offerings, the company has been expanding e-commerce fulfillment centers. Additionally, it focuses on strengthening in-store pickups. The company’s focus on technology improvements and omni-channel expansion are expected to have a positive impact on online sales.
Along with efforts to enhance sales, Kohl’s focuses on boosting margins and bottom-line performance through inventory reductions. In fact, such efforts led to per store inventory reductions of 7% and also aided gross margin growth during the first quarter. Progressing on such lines, the company’s speed and localization initiatives have been facilitating improved inventory management.
Favorable Estimates
Overall, we are impressed with the company’s past performance backed by robust strategies to augment top- and bottom-line performances. In fact, such efforts are expected to help the company offset the negative impacts of rising SG&A expenses.
Incidentally, the current Zacks Consensus Estimate for earnings for the quarter under review is pegged at $1.65, which shows a 33% jump from $1.24 cents recorded in the year-ago quarter. The estimate inched up by 2 cents over the past 30 days. Further, the Zacks Consensus Estimate for revenues is pegged at $4,442 million, reflecting a rise of almost 7% from the year-ago quarter’s figure.
What Does the Zacks Model Predict?
However, our proven model doesn’t show that Kohl’s is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
While Kohl’s carries a Zacks Rank #2, its Earnings ESP of -0.15% makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>