Kohl's surprises in third quarter

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



Kohl's revenue rose a better-than expected 1.2% to $4.43 billion in the period ended Oct. 31. Same-store sales rose 1%. Earnings fell to $120 million, or 63 cents a share, from $142 million, or 70 cents a share, a year earlier. Excluding a loss on the extinguishment of debt, adjusted per-share earnings were 75 cents a share, which also beat expectations.



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.



Macy’s reported disappointing financial results this week, while J.C. Penney is expected to post a strong increase 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.