It looks like rough sledding for Kohl’s ahead, but is Amazon to be a savior?
Kohl’s first quarter results announced Tuesday (May 21) show comparable sales were down 3.4 percent, and amid pressure on that metric, with an ongoing trade war and tariffs that will seemingly hurt results going forward, management also cut guidance for the year.
The aforementioned comp number came amid what management has termed a “slower” start to the year and that was far below the 10 basis point slide that the Street had expected.
Adjusted, non-gaap eps was 61 cents a share, 6 cents below the Street, and a 2.9 percent slide in top line, to $4.09 billion, was still roughly $109 million better than the Street.
Comp sales, according to guidance, will be flat to slightly down initially, though should pick up through the second half of the year.
Management, including CEO Michelle Gass, said that a number of factors have hit results and guidance, among them the trade war that has brought 25 percent tariffs on hundreds of billions of dollars worth of goods imported from China — which of course includes clothing, footwear and other items that line Kohl’s virtual and brick-and-mortar aisles. According to the earnings call, the tariffs have impact on results for home and accessory sales. Activewear showed growth, said management, up mid-single digits in the quarter.
Without detailing digital initiatives with specific numbers, on the earnings call with analysts, management said digital sales were up “high single digits” and that mobile was a majority of those digital sales.
Perhaps no surprise, the company several times has pointed to its rollout of a program slated to go live across all its stores, where customers can return Amazon purchases. Management said on the call that the pact will help boost in store traffic and sales, and represents “the single biggest initiative of the year” and where the rollout will begin in July. In addition, according to commentary, the At Home Group is slated to grow to 600 locations from a current tally of under 200 locations.
The company said earnings will be $5.15 to $5.45 a share, down from a previous forecast of $5.80 to $6.15.