Kohl's looking better in Q2

Increased traffic gave a boost to Kohl's, which reported sales and earnings that topped analysts’ estimates in the second quarter.



The company's net income rose to $208 million, or $1.24 per share, in the quarter ended July 29, from $140 million, or 77 cents per share, in the year-ago period.



Net sales declined 1%, to $4.14 billion. It was the chain's sixth straight quarter of decline. Same-store sales fell 0.4%, not as steep as analysts had expected, compared to a drop of 1.8% last year.



"The traffic momentum that we saw in the combined March/April period accelerated in the second quarter," stated Kohl's chairman and CEO Kevin Mansell. "Though transactions for the quarter were lower than last year, July transactions increased. We are also excited by the sequential sales trend improvement in all our lines of business, all geographic regions, and in both our proprietary and national brand portfolios. Gross margin and SG&A expenses were consistent with our expectations and we are seeing benefits from our ongoing inventory initiatives and the early stages of our cost-saving initiative."



GlobalData Retail analyst Anthony Riva said that even though Kohl's sales continue to decline, the results are still encouraging.



"The much smaller dip in revenues indicates that the business is going in the right direction and has gained momentum since the start of the year," he said. "Meanwhile, Kohl's ongoing work on expense reduction and more careful management of inventory continues to boost profit lines."