Customers leave a Kohl’s store on November 12, 2015 in San Rafael, California.
Justin Sullivan | Getty Images News | Getty images
Kohl’s on Tuesday reported fourth-quarter revenues and sales that were higher than analyst estimates and pointed to stronger growth in 2021.
Under pressure from activist investors, the company said it will restore its dividend and buy back shares.
With its sales under pressure from the pandemic, Kohl’s has worked to get more buyers online and add brands that sell home accessories fitness equipment and makeup to attract new customers. It has also tried to cut costs and shorten inventories, and these efforts have helped improve profits.
“After an extraordinary year of weathering the pandemic, we ended the year in a very solid financial position, and we are entering 2021 with strong momentum,” Chief Executive Michelle Gass said in a statement.
Kohl’s shares were up about 1% in premarket trading.
Here’s how the company fared during the quarter ended Jan. 30 compared to what analysts expected, using a Refinitiv survey:
- Earnings Per Share: Adjusted $ 2.22 vs. $ 1.01 Expected
- Revenue: $ 5.88 Billion vs. $ 5.86 Billion Expected
Kohl’s reported net income of $ 343 million, or $ 2.20 a share, compared to $ 265 million, or $ 1.72 a share, a year earlier. Excluding one-time costs, the company earned $ 2.22 per share, surpassing the analyst predicted $ 1.01.
Revenue fell from $ 6.54 billion a year earlier to $ 5.88 billion, higher than the $ 5.86 billion analysts predicted.
Online sales were up 22% year-on-year and accounted for 42% of total sales.
The company expects sales to rise by a percentage from the mid-teens this year. Analysts expected average revenue growth of 17.5%, or $ 17.64 billion, this year, according to Refinitiv. It predicted that adjusted earnings will be between $ 2.45 and $ 2.95 per share in 2021, broadly in line with expectations of $ 2.67 per share.
Last week, Kohl rejected an investor group’s attempt to seize control of the board. The retailer has argued that it would disrupt the momentum it has had in renewing its business. The group, which consists of Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital, owns a 9.5% stake.
On Tuesday, Kohl’s said it would spend between $ 200 million and $ 300 million on stock buybacks this year. It said it plans to invest at least $ 550 million in capital expenditures, part of which will go towards the debut of hundreds of mini Sephora stores in its stores, and the opening of its sixth US e-commerce fulfillment center.
At the end of last month, Kohl’s said the board had announced a dividend payment of 25 cents per share.
About a year ago, Kohl’s completely withdrew its $ 1 billion unsecured credit facility to increase its cash position, and temporarily suspended its share buybacks. In late March, it had to close its stores across the country for a while in an effort to curb the spread of the coronavirus. Sales took a hit as consumers spent less on clothes and shoes, and more on groceries and other household necessities.
But Kohl’s has largely outperformed shopping center rivals including Macy’s and JC Penney. And analysts expect its positioning outside of the mall will continue to bode well for the retailer in 2021.
Kohl’s shares are up about 45% over the past 12 months, since the market closed on Monday. The retailer has a market cap of $ 8.99 billion, which has outpaced Nordstrom and Macy’s.
Find Kohl’s full press release here.