Beauty And The Boost: Kohl's Beats Q1 Estimates With Strong Margins; Reiterates Sephora Expansion Plans

Kohl’s Corporation KSS shares are trading higher, up over 21.5% at the start of the trading session on Thursday.

The retailer reported first-quarter earnings per share loss of 13 cents, beating the analyst consensus estimate of 37 cents loss. Quarterly sales of $3.23 billion outpaced the Street view of $3.02 billion.

Net sales decreased by 4.1%, and comparable sales decreased by 3.9% in the quarter under review.

Gross margin as a percentage of net sales was 39.9%, an increase of 37 basis points.

Also Read: Kohl’s Dismisses CEO Over’ Undisclosed Conflicts Of Interest’

Operating income was $60 million, higher than $43 million in the prior year. Operating margin was 1.9%, an increase of 58 basis points year-over-year.

Kohl’s exited the first quarter with cash and equivalents worth $153 million, lower than $228 million in the year-ago period.

Inventory was $3.1 billion, an increase of 2% year-over-year.

The company’s long-term debt at the end of the quarter stood at $1.174 billion. That’s lower than $1.638 billion in the year-ago period.

Outlook: Kohl’s reaffirmed its FY2025 GAAP EPS outlook of 10 cents to 60 cents vs. the 44 cents estimate and expects a 4%–6% drop in comparable sales.

The company also maintained its sales forecast of $14.31 billion–$14.62 billion.

Kohl’s expects capital expenditures between $400 million and $425 million for FY2025. It will pay a $0.125 dividend on June 25.

“Capex of $400 million to $425 million will include investments to complete the Sephora rollout, expand impulse queuing fixtures, and enhance omnichannel experience,” Kohl’s Corporation said.

Price Action: KSS shares are trading higher by 6.79% to $8.650 premarket at last check Thursday.

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