According to a sector review last week, Schwab boosted its rating on the consumer discretionary sector “to outperform from marketperform.” This year Schwab has been optimistic about consumers, commenting in the review: “Despite some much-understood handwringing over the state of the consumer, the labor market continues to improve, confidence among consumers appears to be rising, and housing has been steadily adding to many Americans' net worth over the past couple of years. And with what we believe continues to be some pent-up demand in the pipeline, the possibility of consumer discretionary stocks outperforming is very real. Additionally, on the company side of the ledger, we continue to see businesses aggressively manage their costs, while also seeming to better control their inventory in an attempt to maximize their profits. Finally, we believe the recent rise in oil prices largely due to Middle Eastern concerns will be short lived, and that the pullback we see coming will provide a further tailwind to consumers.”
The Schwab report is good news for the sector as the cool fall season and holidays stimulate consumer buying. Here’s an update on Kohl’s Corp. which typically does well in the third quarter, and is reason enough to “KSS and tell.”
Kohl’s Corp. (KSS)
Down 3% over 12 months, Kohl’s Corp. has a market cap of $11.23 billion; its shares were traded at around $52.36 with a P/E ratio of 12.20. The KSS dividend yield is 2.60%. The dividend payout ratio is 31.36%. Over 12 months, Kohl’s has had revenue growth of 13.7% (annual rates per share). Over 5 years, revenue growth was 11.3%. Its book value has growth is 6.3% over 12 months.
Organized in 1988, Kohl's Corporation is a family-focused, value-oriented specialty department store offering moderately priced, exclusive and national brand apparel, shoes, accessories, beauty and home products in an exciting shopping environment. Kohl’s operates 1,155 stores in 49 states, and offers online shopping on at .kohls.com.
Kohl’s Corp. reported financial results for its fiscal second quarter, ended Aug. 3, 2013:
The company reported a profit of $231 million, compared with the same period a year ago with $240 million. Kohl’s revenue was $4.29 billion, an increase of 2% over the same period last year. Gross margin is up slightly at 39.1% from 39%. Total sales increased 2% to $4.28 billion from $4.2 billion in the same period a year ago. Comparable store sales increased 0.9%. Net income decreased 4% to $231 million from $240 million.
According to Internet Retailer, Kohl’s e-commerce sales increased 28% in its fiscal second quarter, despite adjusting to a new e-commerce platform. In the first quarter of 2013, Kohl’s e-commerce sales increased around 31.1% to $329 million from $251 million in the same quarter of 2012. Kohl’s Internet sales account for 7.8% of total sales in the first quarter of 2013 compared with 5.9% in the same quarter of 2012. Internet Retailer also shows that Kohl’s e-commerce sales grew to $1.02 billion in 2011, up from $743.3 million in the prior year.
Guru Action: As of June 30, 2013, 16 gurus hold KSS and there is active insider trading.
In the second quarter of 2013, Robert Olstein made a new buy of 140,000 shares at an average price of $49.51, for a gain of 4.5%.
Long-time stakeholder Steven Cohen had sold out in the first quarter of 2013, selling 21,129 shares at an average price of $45.48 for a gain of 13.7%. In the second quarter, Cohen made a new buy of 93,592 shares at an average price of $49.51, for a gain of 4.5%.
Track historical share pricing, revenue and net income:
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