Loyalty Programs Remain A Pillar For Kohl's In Q3

Thursday before market open, Kohl’s Corp. KSS reported strong Q3 earnings compared to some of its department store peers, and the share price jumped more than 13 percent.

BMO Capital Markets analyst Wayne Hood maintains a Market Perform rating and price target of $51 after the better-than-expected earnings report.

Quarter In Review

Loyalty programs were key for Hood’s thesis, especially those implementing technology to personalize offers for their consumers. These will increase loyalty with the credit card program, Kohl’s Cash and Yes2You rewards, according to the analyst.

The analyst also highlighted improvements in inventory management and the tangible effects of the “Speed Initiative.” Inventory declined 10.1 percent year over year, with sales falling 2.3 percent.

Benefits Looking Forward

The improved inventory will have a few main benefits, according to Hood:

1. Improved cash flow.
2. Improved merchandise markdowns.
3. More free capital to “chase emerging trends.”

At last check, Kohl's was up 5.14 percent at $53.57.