View outside Kohl’s store in Miramar, Florida.
Johnny Louis | Getty Images
Kohl’s CEO Michelle Gass said the retailer gained momentum at the end of the holiday quarter thanks in part to the influx of shoppers who come to their stores to make returns to Amazon.
The department store chain said on Thursday that it anticipates fourth-quarter tax revenue will fall by around 10% year-on-year, and same-store sales will drop 11%, but sales have been gaining momentum in recent weeks. Analysts had been asking for a drop in revenue of 8.9%, according to a survey compiled by Refinitiv.
“You could assume that returns, which are normally higher in January, played an important role in increasing traffic at the end of the quarter,” Gass said in a telephone interview. Kohl’s accepts returns from Amazon at its more than 1,100 locations, most of which are outside the mall.
The department store chain, for its part, said it expects fourth quarter earnings per share to be in the range of $ 1.00 to $ 1.05, before considering any impact of tax planning strategies. Analysts had been asking for a profit of 70 cents per share, on an adjusted basis.
Kohl’s shares were up more than 4% on Thursday morning.
With more buyers visiting Kohl’s website during the pandemic, Chief Executive Michelle Gass said digital sales accounted for more than 40% of net sales during the period, an increase of more than 20% year on year.
“Our performance in the fourth quarter exceeded our expectations on all key metrics with strengthening sales as we move through the period,” she said in a statement, adding that the company managed expenses more strictly, helping it to strengthen its financial position towards the new year.
“As we carry this momentum to 2021, we are confident that our main strategic initiatives will be accelerated,” said Gass, highlighting Kohl’s upcoming autumn launch with Sephora and the bet that the partnership will bring more shoppers to its stores.
Gass said sportswear, home goods and beauty remain among the retailer’s top performing categories.
“Kohl’s is extremely well positioned as we move into the next year,” she said. “There have been a lot of disruptions in the industry and we are going to benefit from that.”
At the close of the market on Wednesday, Kohl’s shares were up more than 8% in the past 12 months. Kohl’s has a market capitalization of $ 7.35 billion, which has grown to be greater than that of Nordstrom and Macy’s.
Kohl’s is due to release its fourth quarter results on March 2.
Find the full Kohl press release here.