A look outside a Kohl’s store in Miramar, Florida.
Johnny Louis | Getty Images
Kohl’s CEO, Michelle Gass, said the retailer got a boost at the end of the holiday quarter, thanks in part to the influx of customers coming to its stores to have Amazon return.
The department store chain said on Thursday that it expects fourth-quarter sales to drop by about 10% year over year, and sales at the same store to drop 11%, but sales have accelerated in recent weeks. Analysts called for a sales decline of 8.9%, according to a poll by Refinitiv.
“You could assume that returns, which are typically higher in January, have played a role in driving traffic towards the end of the quarter,” Gass said in a phone interview. Kohl’s accepts Amazon returns in its more than 1,100 locations, most of which are outside the mall.
The department store chain, meanwhile, said it expects fourth-quarter earnings per share to be between $ 1.00 and $ 1.05 before accounting for the impact of tax planning strategies. Analysts asked for a profit of 70 cents a share, on an adjusted basis.
Kohl’s shares were up more than 4% Thursday morning.
With more customers 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, up more than 20% year-on-year.
“Our performance in the fourth quarter exceeded our expectations by all major measures with increased sales as we progressed through the period,” she said in a statement, adding that the company was managing spending more tightly and helping to strengthen its financial position on way to the new year.
“As we continue this momentum into 2021, we are confident that our key strategic initiatives will accelerate,” said Gass, highlighting Kohl’s upcoming fall launch with Sephora, and bet that the partnership will drive more customers to its stores.
Gass said activewear, homewares and beauty are still among the retailer’s top performing categories.
“Kohl’s is extremely well positioned as we move into the next year,” she said. “There has been a lot of disruption in the industry and we are going to benefit from it.”
As of Wednesday’s close, shares of Kohl are up more than 8% over the past 12 months. Kohl’s has a market cap of $ 7.35 billion, which has outpaced Nordstrom’s and Macy’s.
Kohl’s will publish its fourth quarter results on March 2.
Find the full Kohl’s press release here.