Kohl's Corporation’s (KSS, Financial) stock fell tremendously after the company posted very low sales for the first fiscal quarter. Share value fell 13.27% to $9.89 on regular session Thursday. The financial report for the period ended May 2, 2015 was declared on Thursday morning. Sales of the Wisconsin-based company were $4.12 billion, falling short of analysts' expectations of $4.19 billion. However, sales saw an increase over last quarter's $4.07 billion. Yahoo! (YHOO) Finance shows stated that the 13% plunge in share value was the company's largest one-day stock price decline.
Number mix
Diluted earnings reported was $0.63 per share. This was above analysts' expectations of EPS $0.55 a share, according to a data compiled by Bloomberg. Net income posted was $127 million on $4.12 billion revenue. The department store reported profit of $125 million on $4.07 billion revenue, or $0.60 a share year-over-year. Wall Street had estimated the net income to come in at $112.29 million on $4.19 billion revenue, according to Thomson Reuters I/B/E/S. Comparable store sales witnessed a 1.4% rise. Analysts had expected a 2.4% increase for same-store sales. Though the company is making serious efforts to bring about positive changes, what it calls "greatness agenda," it doesn't seem to be working in its favor. At least not for now.
Gross margin for the quarter rose 36.9% as compared to the 36.8% rise for the same period last year. This change was almost 17 Basis Points. The chairman, CEO and president, Kevin Mansell, said that he was happy with the results. Though sales didn't perform as per expectations, sales saw a boost in the March/April combined period. February was not a very good month for sales, he said. The retail chain also started operations of two new stores in the quarter. Currently, around 1,164 stores are operational in 49 different states. Given that the company is expanding in terms of opening new stores, there might be an increase in sales for the next quarter. Sales increased to $4.12 billion from $4.07 billion in the first fiscal quarter last year.
The financial reports were declared just one day after the U.S. Commerce Department said that retail sales for the month of April were flat as compared to the prior month. The main reason for the flat sales were consumers preferring to save from low gas prices than going shopping, the reported stated. Kohl's cash and cash equivalents at end of period was $1195 million as compared to $717 million for the same period last year. Net cash used in financing activities was $139 million for the quarter. Total assets including property and equipment, net and other assets was $14,563 million while total current liabilities was $2,985 million. Therefore, total liabilities and shareholders' equity was $14,563 for the quarter ended May 2, 2015 as compared to $14,114 for the quarter ended May 3, 2014. The selling, general and administrative expenses constituted 24.6% of net sales and operating income was 6.8% of net sales.
Investor take
On Wednesday, Kohl's board of directors announced a quarterly cash dividend of 14 cents a share on common stock. This amount will be payable to investors next month on the 24th. The annual shareholders' meeting will be held at Discovery World Thursday in Milwaukee where queries of investors will be addressed. Kohl Corporation sells a variety of items including footwear, clothing, jewelry, electronics, household items, cosmetic products, furniture, etc. For the full year 2015, Kohl expects EPS in the range from $4.20 to $4.22. Analysts have predicted that the company will earn $4.04 a share for the year. JC Penney Company Inc. (JCP, Financial), Kohl's largest competitor, posted losses for the quarter. Though sales increased 2% to $2.86 billion, losses of $173 million or $0.55 per share were reported. Kohl is also gaining an edge over rival Macy's Inc. (M, Financial). Given that Kohl's is America's third-largest department store chain by the number of stores, Kohl does have an advantage of grabbing the market share and increasing sales. Kohl's stock has increased by 22% since the beginning of this year and 36% since the past 12 months.
