Kohl’s Q4 profits fall, but beat forecasts

Despite strong online volume, low store traffic translated into weak fourth quarter sales for Kohl’s.



For the quarter ended January 28, 2017, the department store chain’s profits fell 15% to $252 million, or $1.44 per share, from $296 million for the same period last year. Meanwhile, revenue dropped 2.8% to $6.21 billion, from $6.39 billion in 2015. Yet, the company still exceeded analysts’ expectations of revenue hitting $6.2 billion, or $1.32 per share.



Same-store sales also dropped, slipping 2.2% during the quarter, a by-product of more shoppers opting for the ease of online shopping. Conversely, this loss was “offset somewhat by strength in online demand,” said Kevin Mansell, Kohl's chairman, CEO and president.



For the year, the chain’s revenue hit $18.69 billion, a drop from $19.20 billion in 2015. Net income was $556 million, sliding from $673 million last year.



During 2016, the company opened nine small format Kohl's stores, closed 19 Kohl's stores, opened two Off/Aisle locations, and 12 FILA outlets. By the end of the fiscal year, the chain operated 1,154 Kohl's stores in 49 states, as well as an e-commerce site.



“Sales results were weak for the quarter in total, driven by declines in brick and mortar traffic,” Mansell said. “We saw improvement in merchandise margin, and our team continued to manage inventory and expenses extremely well.”



For 2017, the chain plans to accelerate its focus on “becoming the destination for active and wellness with the launch of Under Armour in early March,” he added. “We will also extend our efforts on improving our speed to market across all of our proprietary brands into all apparel areas and home.”