Kohl's Corp. (KSS, Financial) is trading at a P/S ratio – 0.38 – that is close to its 10-year low of 0.36.
Kohl’s is a department store chain that started in Brookfield, Wisconsin, and now has more than 1,100 stores around the U.S. The company has an online presence with its website Kohls.com as well as an app.
Kohl’s stock prices have been around $40 to $60 per share since 2009, with a peak at around $80 in 2015. The current stock price is around $50. The company has shown consistent revenue growth throughout the years.
In 2014, Kohl’s introduced a new business strategy referred to as “the Greatness Agenda.” This revolves around five concepts: amazing product, incredible savings, easy experience, personalized connections and winning teams. It is designed to increase revenue by increasing the number of consumers in store and online. Throughout 2015, Kohl’s focused on providing national brands such as Nike (NKE, Financial), Levi’s, and Carter's (CRI, Financial) to increase sales.
In 2015, the company also introduced “BOPUS,” buy on-line and pick up in-store option for consumers, as well as a new mobile platform to enhance the digital shopping experience.
GuruFocus has found two severe warning signs for Kohl’s:
- Declining gross margin.
- Declining operating margin.
In its 2016 first-quarter results, the company announced net sales of $3.97 billion and net earnings of $17 million. This is compared to the company’s 2015 first-quarter net sales of $4.12 billion and net earnings of $127 million. Kohl’s comparable sales increased by 0.7% in 2015; this is a turning point from declining sales before 2014.
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