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.
Kohl's Stock Up 10% in 6 Months on Sales-Driving Initiatives
Read MoreHide Full Article
Kohl's Corporation (KSS - Free Report) is riding on strong e-commerce business and efforts to solidify the brand portfolio. Further, the company is expected to keep gaining from its enhanced ties with Amazon (AMZN - Free Report) . Also, its efficient inventory management initiative bodes well.
These factors helped this Zacks Rank #3 (Hold) stock showcase a decent run in the past six months despite cost-related headwinds and elevated tariff threats. Notably, Kohl's shares have gained 10% in the past six months against the industry’s decline of 6.1%.
Let’s take a closer look at the factors working in favor of this department store retailer.
Factors Shaping Kohl's Growth Story
Kohl’s has been benefiting from its growing e-commerce business for a while now. Its online business has been gaining from strong assortments and favorable impacts from the company’s customer-centric investments. To this end, Kohl’s has been expanding its e-commerce fulfillment centers. In fact, the company recently made investments in its sixth fulfillment center. Notably, digital sales witnessed a mid-teen increase during third-quarter fiscal 2019.
Additionally, Kohl’s has been focusing on strengthening in-store pickups. The company witnessed increased adoption of Buy-Online-Ship-to-Store (or BOSS) in the third quarter. Further, we note that its investments toward boosting the capabilities of online applications have improved consumer engagement. In fact, the Kohl’s app grew considerably in the third quarter, with traffic nearly doubling and sales almost tripling on the back of increased customer usage.
Apart from this, Kohl’s inventory management efforts bode well. The company’s aged inventories have been declining consistently and providing more space for fresh assortments. Notably, inventory dollars increased 1% in the third quarter compared with the last reported quarters’ 2% rise.
Also, Kohl’s has been strengthening ties with retail giant Amazon to drive traffic. Incidentally, the company completed the rollout of the Amazon returns program nationwide. According to this program, Kohl’s stores are accepting free, unpackaged and easy returns for customers of Amazon. The company expects to witness improved store traffic from the Amazon returns program.
Hurdles Likely to be Countered
Kohl's witnessed higher selling, general and administrative (SG&A) expenses in the third quarter due to increased marketing and IT expenses. Moreover, the company witnessed higher store-related expenses due to the significant number of brand launches, wage rate pressures, early holiday hiring and the Amazon Returns program. Consequently, high costs exerted pressure on the company’s operating income, which declined 20.9% from the prior-year quarter’s figure. Also, the potential impacts from tariffs on merchandise sourced from China are concerning.
Nevertheless, the company’s aforementioned initiatives to drive traffic and sales are encouraging. We expect these upsides to help Kohl’s continue being in investors’ good books.
DICK'S Sporting Goods, Inc. (DKS - Free Report) , also with a Zacks Rank #1, has a long-term EPS growth rate of 6.5%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Kohl's Stock Up 10% in 6 Months on Sales-Driving Initiatives
Kohl's Corporation (KSS - Free Report) is riding on strong e-commerce business and efforts to solidify the brand portfolio. Further, the company is expected to keep gaining from its enhanced ties with Amazon (AMZN - Free Report) . Also, its efficient inventory management initiative bodes well.
These factors helped this Zacks Rank #3 (Hold) stock showcase a decent run in the past six months despite cost-related headwinds and elevated tariff threats. Notably, Kohl's shares have gained 10% in the past six months against the industry’s decline of 6.1%.
Let’s take a closer look at the factors working in favor of this department store retailer.
Factors Shaping Kohl's Growth Story
Kohl’s has been benefiting from its growing e-commerce business for a while now. Its online business has been gaining from strong assortments and favorable impacts from the company’s customer-centric investments. To this end, Kohl’s has been expanding its e-commerce fulfillment centers. In fact, the company recently made investments in its sixth fulfillment center. Notably, digital sales witnessed a mid-teen increase during third-quarter fiscal 2019.
Additionally, Kohl’s has been focusing on strengthening in-store pickups. The company witnessed increased adoption of Buy-Online-Ship-to-Store (or BOSS) in the third quarter. Further, we note that its investments toward boosting the capabilities of online applications have improved consumer engagement. In fact, the Kohl’s app grew considerably in the third quarter, with traffic nearly doubling and sales almost tripling on the back of increased customer usage.
Apart from this, Kohl’s inventory management efforts bode well. The company’s aged inventories have been declining consistently and providing more space for fresh assortments. Notably, inventory dollars increased 1% in the third quarter compared with the last reported quarters’ 2% rise.
Also, Kohl’s has been strengthening ties with retail giant Amazon to drive traffic. Incidentally, the company completed the rollout of the Amazon returns program nationwide. According to this program, Kohl’s stores are accepting free, unpackaged and easy returns for customers of Amazon. The company expects to witness improved store traffic from the Amazon returns program.
Hurdles Likely to be Countered
Kohl's witnessed higher selling, general and administrative (SG&A) expenses in the third quarter due to increased marketing and IT expenses. Moreover, the company witnessed higher store-related expenses due to the significant number of brand launches, wage rate pressures, early holiday hiring and the Amazon Returns program. Consequently, high costs exerted pressure on the company’s operating income, which declined 20.9% from the prior-year quarter’s figure. Also, the potential impacts from tariffs on merchandise sourced from China are concerning.
Nevertheless, the company’s aforementioned initiatives to drive traffic and sales are encouraging. We expect these upsides to help Kohl’s continue being in investors’ good books.
Don’t Miss These Solid Retail Stocks
Chuy's Holdings, Inc. , with a Zacks Rank #1 (Strong Buy), has a long-term earnings per share (EPS) growth rate of 17.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DICK'S Sporting Goods, Inc. (DKS - Free Report) , also with a Zacks Rank #1, has a long-term EPS growth rate of 6.5%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>