Kohl’s earnings top estimates, retailer raises forecast as higher foot traffic drives sales

Kohl’s reported Thursday fiscal second-quarter earnings that beat analyst expectations and it raised its forecast for the year, as shoppers headed back to its stores.

The company’s stock rose more than 4% on the news.

“Based on our results, we are raising our full year 2021 guidance, which positions us to achieve many of our 2023 strategic goals this year, well ahead of our plan,” said CEO Michelle Gass, in a press release.

Here’s how the company did for its second quarter ended July 31 compared with what analysts surveyed by Refinitiv were anticipating:

• Earnings per share: $2.48 vs. $1.21 expected
• Revenue: $4.45 billion vs. $4.02 billion expected

Net income rose to $382 million, or $2.48 per share, from $47 million, or 30 cents per share, a year earlier. The results topped the $1.21 per share expected by analysts surveyed by Refinitiv.

Revenue rose 31% to $4.45 billion, outpacing estimates of $4.02 billion.

Kohl’s expects full-year earnings per share to range from $5.80 to $6.10, up from $3.80 to $4.20.

During the quarter, Kohl’s repurchased $255 million of its stock. It said it plans to buy back $500 million to $700 million of its shares this year, up from $200 million to $300 million.

Kohl’s raised its net sales outlook for the year. It expects sales to grow at a low twenties percentage, up from the mid-to-high teens.

Earlier this month, the retailer opened up its first batch of Sephora locations in its stores. In the Thursday release, Gass said the company is on the eve of launching several more partnerships.

Rival department store Macy’s also raised its outlook on Thursday, saying it was able to bring in new shoppers, ahead of the back-to-school season. Earlier this week, Walmart and Target reported quarterly sales that beat expectations.

The spread of the highly contagious delta variant has not yet shown much of an impact on retailers’ results even as some businesses reinstated mask mandates. The growth in Covid-19 cases has varied region by region, and is often worse in areas with low vaccination rates.

Shares of Kohl’s are up more than 27% year to date as of Wednesday’s market close, putting the retailer’s market value at $8.1 billion.