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Kohl’s lifts outlook on strong holiday performance

Kohl’s Corp. has joined rivals Macy’s and J.C. Penney in reporting surprisingly robust holiday sales.

The department store retailer reported that its same-store sales rose 6.9% during November and December over the year-ago period. All regions and lines of businesses posted comp sales, the company stated.

“As expected, growth in digital demand accelerated significantly in the holiday period from the year-to-date trend,” said Kohl’s chairman and CEO Kevin Mansell. “In addition, we experienced positive sales in our stores driven by stronger traffic.”

Kohl’s has taken a number of steps in the past to improve store traffic, including a partnership with Amazon that includes accepting returns for the online giant.

Analysts were impressed by Kohl’s performance.

“After good updates from both Macy's and J.C. Penney, Kohl's positive sales growth comes as no surprise, commented Neil Saunders, managing director of GlobalData Retail. “However, the extent of the increase is impressive and suggests that Kohl's grew its market share over the holiday season. In our view, the 6.9% uplift in comparables puts Kohl's firmly in the winner's enclosure.” (For more, click here.)

Based on stronger than expected holiday sales and expectations for fiscal January, Kohl’s now expects its fiscal 2017 diluted earnings per share to be $4.10 to $4.20 versus its previous guidance of $3.72 to $3.92. Excluding a previously disclosed fourth quarter tax settlement of $30 million, diluted earnings per share is expected to be $3.98 to $4.08, compared to its prior guidance of $3.60 to $3.80.

The company’s guidance does not include the impact of recent changes in federal tax legislation which it said are expected to have a positive impact on its effective tax rate and generate a favorable non-cash tax benefit related to the re-measurement of deferred tax balances in 2017.
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