Kohl's grows sales, but not by much

Strong back-to-school sales allowed Kohl's to upstage Macy's in the third quarter.

Kohl's reported that for the third quarter ended Oct. 31, same store sales increased 1%. It had net income of $120 million, or 63 cents per share, compared with net income of $142 million, or 70 cents per share, in the same period a year before. Revenue rose 1.2% to $4.43 billion.

Kevin Mansell, Kohl's chairman, CEO and president, said: "Our 1% increase in sales was driven by strong back-to-school and late October selling periods offset by a weak September. Most of our key initiatives enjoyed strong success while weakness was concentrated in seasonal businesses."

Department stores, already facing a slowdown in foot traffic at physical locations, have struggled to clear out-of-season products from their shelves. Unseasonably warm weather also has hurt sales because fewer consumers are buying winter clothes.

During the quarter, the company completed its $1.1 billion debt refinancing when it settled $318 million of debt that had been called in the second quarter. In conjunction with the refinancing, the company incurred a debt extinguishment loss of $169 million, including $38 million which was recognized in the third quarter.

Macy’s reported disappointing financial results this week, while JCPenney is expected to post a strong incraese in same store sales.

Up until a few years ago, Kohl’s was one of the fastest-growing retailers ever. Shoppers loved the stores, the coupons and the prices. But recently the company has experienced same store sales declines and shrinking profits.

Kohl’s ended the quarter with 1,166 stores in 49 states, compared with 1,163 stores at the same time last year.