Kohl's Corp. reported first-quarter earnings that crushed estimates and expressed confidence about the rest of the year as it raised its full-year outlook.
"As we have all seen recently, the U.S. consumer is in a stronger position," Kohl's CEO Michelle Gass said on the company's earnings call. "Spending has picked up driven by stimulus, easing COVID restrictions, and people resuming more normalcy in their daily lives."
Kohl's is in the midst of preparing for the August 1 online launch of its partnership with Sephora, which will be followed in the fall by the opening of 200 in-store Sephora shops at Kohl's, with a total of 850 locations by 2025.
"Customers will see construction in stores in the weeks leading up to the fall store openings," Gass said. "This will be about a six-week process for each store, and we are working hard to minimize any disruptions."
Gass told analysts that Kohl's has "never been as well positioned" as it is now for back-to-school and holiday," citing not only the Sephora partnerships but several new brands and initiatives that will launch in the fall.
Kohl's reported net income of $14.0 million, or $0.9 per share, in the quarter ended May 1, compared to a loss of $541.0 million, or $3.52 per share, last year. Adjusted earnings $1.05 easily blew past analysts estimates for $0. 8.
Revenue rose 69.5% to $3.89 billion from $2.43 billion last year and beating estimates of $3.68 billion. While the quarter was a marked improvement over the year-ago pandemic period, total revenue were still lower than in 2019.
Store sales more than doubled during the quarter, while digital sales rose 14% year-over-year.
"Along with a favorable consumer spending backdrop, we continue to see our key strategic initiatives gain traction and resonate with customers,” stated Gass. “We saw momentum build through the quarter, especially in our stores where we continue to elevate the experience."
Based on its first-quarter results, Kohl’s said it was raising its full year 2021 guidance. The retailer now expects full-year adjusted earnings per share to be between $3.80 and $4.20, up from a prior range of $2.45 to $2.95.
Net sales are estimated to rise in the mid-to-high teens percentage range, compared with a previous expectation of a mid-teens percentage jump.
“We are positioned to capitalize on growth opportunities during the balance of 2021 and remain firmly on track to achieving our 2023 strategic goals,” said Gass.