:max_bytes(150000):strip_icc()/GettyImages-2207216658-0c1cac49368047e1bf5a4fc9cae19ba2.jpg "Kohl’s Stock Soars 20% as Struggling Retailer Says Turnaround Effort Is Working")
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Key Takeaways
- Kohl’s reported profit ahead of forecasts and raised its guidance, citing success in its efforts to turn around the struggling retailer.
- The company’s comparable sales also declined less than anticipated.
- Kohl’s gave a profit outlook that exceeded forecasts.
Kohl’s (KSS) shares soared 20% Wednesday as the struggling retailer posted second-quarter profit well above expectations and raised its outlook as its turnaround plan showed positive results.
The company reported adjusted earnings per share (EPS) of $0.56, well above the $0.31 that analysts surveyed by Visible Alpha were looking for. Revenue dipped more than 5% year-over-year to $3.35 billion, short of forecasts. However, comparable sales only declined 4.2%, while the Visible Alpha estimate was for a drop of 4.75%.
Gross margin increased 28 basis points to 39.9%, selling, general, and administrative (SG&A) expenses were cut 4.1%, and Kohl’s reduced its inventory 5% to $3.0 billion.
Interim CEO Michael Bender said the performance was “a testament to the progress we are making against our 2025 initiatives.”
Kohl’s now sees full-year revenue sliding 5% to 6%, compared to its earlier outlook of down 5% to 7%. In addition, the company’s guidance for adjusted EPS of $0.50 to $0.80 was well ahead of the Visible Alpha prediction of $0.34.
Shares of Kohl’s traded at their highest level in nine months. In late July, shares soared after the company was a major topic of conversation on r/wallstreetbets, the subreddit that fueled the meme stock craze of 2021.
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