Kohl’s Q2 sales and earnings decline

Second quarter net sales at Kohl’s Corporation decreased 4.8 percent and comparable sales decreased 5 percent, while diluted earnings per share reached 52 cents.

The company’s first half net sales decreased 4.1 percent to 7 billion dollars, with comparable sales down 4.7 percent.

Commenting on the trading update, Tom Kingsbury, Kohl’s chief executive officer, said: “Our second quarter earnings were in line with our expectations. We maintained strong sales momentum in Sephora at Kohl’s, reduced inventory by 14 percent, and managed expenses tightly. Further, solid cash flow generation allowed us to reduce our borrowings in the period.”

Kohl’s Q2 and H1 result highlights

The company’s gross margin as a percentage of net sales was 39 percent, a decrease of 61 basis points, operating income was 4.2 percent, a decrease of 233 basis points year-over-year.

Net income for the quarter was 58 million dollars or 52 cents per diluted share compared to 143 million dollars or 1.11 dollars per diluted share in the prior year.

Gross margin as a percentage of net sales for the first half was 39 percent, a decrease of 1 basis point. Net income was 72 million dollars or 65 cents per diluted share.

Kohl’s reaffirms outlook

For the full year 2023, the company reaffirms its financial outlook and currently expects net sales to decrease in the range of 2 percent to 4 percent, operating margin of approximately 4 percent, and diluted earnings per share in the range of 2.10 dollars to 2.70 dollars.

“We have enhanced the store experience and recently opened an additional 200 Sephora at Kohl’s shops, and are taking steps to further optimise our assortment and simplify our value strategies. Looking ahead, we are reaffirming our 2023 guidance and remain confident in our longer term opportunity,” added Kingsbury.

On August 8, 2023, Kohl’s board of directors declared a quarterly cash dividend on the company’s common stock of 50 cents per share payable September 20, 2023 to shareholders of record at the close of business on September 6, 2023.