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 revenue and sales that were above analysts’ estimates, pointing to strong growth in 2021.
Under pressure from activist investors, the company said it would reinstate its dividend and buy back shares.
With its sales under pressure from the pandemic, Kohl’s is working to drive more buyers online and add brands that sell home accessories, fitness equipment and makeup to attract new customers. It also tried to reduce costs and cut inventory, and these efforts helped improve profits.
“After an extraordinary year that the pandemic went through, we ended the year in a very solid financial position, and we are entering 2021 with a strong momentum,” CEO Michelle Gass said in a statement.
Kohl’s shares rose 1% in pre-trading.
Here’s how the company performed during the quarter ended January 30, compared to what analysts expected, using a Refinitiv survey:
- Earnings per share: $ 2.22 adjusted to $ 1.01 expected
- Revenue: $ 5.88 billion expected against $ 5.86 billion
Kohl’s net income was $ 343 million, or $ 2.20 per share, compared to $ 265 million, or $ 1.72 per share, a year earlier. If the cost is not one-time, the company earns $ 2.22 per share, above the $ 1.01 forecast by analysts.
Sales fell to $ 5.88 billion, from $ 6.54 billion a year earlier, above analysts’ forecast of $ 5.86 billion.
Online sales increased by 22% from a year earlier and accounted for 42% of total sales.
The company expects sales to rise by a mid-teen percentage this year. According to Refinitiv, analysts expected an average growth of 17.5%, or $ 17.64 billion, this year. The forecast was that adjusted earnings for 2021 would be between $ 2.45 and $ 2.95 per share, largely in line with the expectation of $ 2.67 per share.
Kohl’s last week rejected an investor group’s attempt to take control of its board. The retailer argued that it would disrupt the momentum he had to revamp his business. The group, which consists of Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital, owns a 9.5% stake.
Kohl’s said on Tuesday that it will spend between $ 200 and $ 300 million this year on repurchasing shares. It is said that it intends to invest at least $ 550 million in capital spending, and some of the money will go to the debut of hundreds of mini-Sephora stores in its stores, and the opening of its sixth U.S. e-commerce center.
Late last month, Kohl’s said the board had declared a dividend payment of 25 cents per share.
About a year ago, Kohl took full advantage of his $ 1 billion unsecured credit facility to increase his cash position, temporarily suspending share repurchases. At the end of March, the country had to close its stores nationwide for a period in an effort to limit the spread of the coronavirus. Its sales suffered a setback as consumers spent less money on clothing and footwear, and more on groceries and other household necessities.
But Kohl’s fared better than rivals in malls, including Macy’s and JC Penney. And analysts expect the position outside the mall to remain good in 2021.
Kohl’s shares have risen about 45% over the past twelve months since the market closed. The retailer has a market capitalization of $ 8.99 billion, which has become larger than that of Nordstrom and Macy.
Find the full press release from Kohl’s here.