Kohl’s Q4 earnings, sales top estimates; raises dividend

Kohl’s Corp. beat the Street for the fourth quarter as it closed the book on a disappointing year that did not meet its expectations. 

Kohl’s net income totaled $265 million, or $1.72 per share, for the quarter ended Feb. 1, down from $272 million, or $1.67 per share, in the year-ago period. Adjusted EPS was $1.99 per share, topping analysts’ estimates for $1.88. 

Total revenue inched up to $6.83 billion from $6.82 billion. Analysts had expected $6.52 billion. Same-store sales were flat. 

On an earnings conference call with analysts, CEO Michelle Gass said that Kohl's  women's apparel was challenged throughout the year.

"We recognize that we need a much more significant reinvention in women to improve the trajectory moving forward," she told analysts.

Gass said that Kohl's is making "bold moves" to improve the business, including a decision to exit eight of its women's brands during the coming year.  She did not name the brands, but said the company will provide more details at its upcoming meeting with investors.

For the full year, Kohl’s reported sales of $19.9 billion, down from $20.2 billion in the previous year. Same-store sales fell 1.3%. Income totaled $769 million, down from $927 million a year earlier. 

Kohl's raised its dividend 5% to $0.704 per share payable April 1, 2020 to shareholders of record at the close of business on March 18, 2020. 

"While 2019 was a year in which our financial results did not meet our expectations, it was also a year of innovation and investment that further strengthened Kohl’s differentiation in the market,” said Michelle Gass, CEO, Kohl’s. “We are encouraged by the acceleration of traffic and new customer acquisition in our stores and online driven by the unprecedented level of new brands and partnerships we launched during the year. I am confident that we will build on our strengths in 2020 to stabilize and position the business for future growth.”

In February, Kohl’s announced a corporate restructuring that included the elimination of some 250 positions. 

For 2020, the retailer expects earnings per share of $4.20 to $4.60, and same-store sales from down 1% to up 1%. The Street forecast earnings per share of $4.58 and a comparable sales decline of 1.3%.