Kohl’s shares up in pre-market trading after strong Q3 sales

MENOMONEE FALLS, Wis. – Shares of Kohl’s rose nearly 9% in premarket trading after the company posted a third quarter net sales increase of 15.5% for the quarter ending Oct. 30, 2021.

Revenue for the quarter came in at $4.6 billion versus expected revenue of $4.27 billion.

Kohl’s also posted record third quarter earnings per share of $1.65 compared to negative .08 cents in the third quarter of last year.

The company has revised its guidance for the fourth quarter with net sales expected to increase in the mid-twenties percent range compared to the previous expectation of low-twenties percentage range.

“Our strategic efforts to transform Kohl’s into the leading destination for the active and casual lifestyle continue to build momentum. We delivered another quarter of record earnings with both sales and margins exceeding expectations,” said Michelle Gass, Kohl’s CEO. “During the quarter, we drove accelerated growth in active and successfully launched several new brand partnerships, including the initial rollout of 200 Sephora at Kohl’s stores.”

Gass added that all of the pieces of the company’s strategy are coming together and they remain confident in the future of the business. On the call with investors, Gass said the efforts to reposition Kohl’s are working and the company expects to exceed its 2023 goals this year.

“The home category is really resonating with customers, especially anything for the kitchen,” Gass said on the earnings call. “It’s one of the categories we are focusing on for the upcoming holiday season.”

The company also experienced significant growth in its omnichannel customers which are the most productive, according to Gass, with digital sales increasing 33% on a two-year basis. On the brick-and-mortar side, the company plans to open 250 new stores by 2023 and has recently opened four new stores in the beginning of this fourth quarter.

Gass said on the call that Kohl’s has experienced some supply chain challenges with extended transit times and the most visible evidence is that inventory levels are down 25% on a two-year basis. The company said it has implemented a number of measures to minimize these delays as much as possible.