Kohl's Gains 2% Following Q4 Earnings Beat, Business Update

Shares of Kohl's Corporation KSS were trading higher by around 2 percent after the company reported its fourth quarter results.

Kohl's said it earned $1.58 per share in the fourth quarter on revenue of $6.387 billion. Wall Street analysts were expecting the company to earn $1.56 per share on revenue of $6.39 billion.

Net income for the quarter fell to $296 million from $369 million in the same quarter a year ago as comparable store sales rose just 0.4 percent after rising 3.7 percent a year ago.

"We believe that the strategic framework of the Greatness Agenda is working as evidenced by our achievement of five consecutive quarters of positive comparable sales increases. I am particularly encouraged by the 4% increase we saw between Thanksgiving and Christmas. At the most competitive time in retail, customers were choosing Kohl's," said Kevin Mansell, Kohl's chairman, president and chief executive officer. "This strength, however, was substantially offset by softness in early November and in January when demand for cold-weather goods was especially low, resulting in a quarterly comparable sales increase of 0.4%, which was below our expectations."

Kohl's also updated investors on ongoing initiatives to drive sales in the coming year. The company plans to pilot a new smaller format store and will test the concept in 7 markets across the U.S. The company will also test off-aisle stores and open 12 Fila outlet stores - its first entry into the outlet space.

Kohl's also announced it will shut down 18 underperforming stores which will generate an annual SG&A savings of around $45 million and will incur costs of $150 million to $170 million in charges as part of the store closure.

Finally, Kohl's issued full year 2016 guidance and expects to earn $4.05 to $4.25 per share and see total sales range between a 0.5 percent decline to a 0.5 percent gain. Comparable sales for the full year are expected to be flat to up 1 percent.

Wall Street analysts were estimating Kohl's will earn $4.24 per share in the full fiscal year.