As its Sephora rollout nears completion, Kohl’s reaffirmed guidance for the year after posting better-than-expected first-quarter financial results.
Kohl’s indicated that the priorities it has set in categories across the store, including home, are beginning to gain traction as it continues its turnaround efforts.
Net loss was $15 million, or 13 cents per diluted share, versus a net loss of $27 million, or 24 cents per diluted share, in the year-prior quarter.
The loss came in less than a Yahoo Finance-published analyst consensus estimate of 22 cents while revenues topped a $3.06 billion forecast.
Comparable sales slipped 3.9% in the quarter year over year, the company reported. Net sales were $3.05 billion versus $3.18 billion in the year-before period, while total revenues came in at $3.23 billion versus $3.38 billion.
Operating income was $60 million versus $43 million in the year-previous quarter.
In a conference call, Jill Timm, Kohl’s CEO, says initiatives the company has adopted are taking hold, but more progress remains to be made. Kohl’s has set three priorities moving forward: providing a curated, more balanced assortment that fulfills needs across all customers, reestablishing Kohl’s as a leader in value and quality, and delivering a frictionless shopping experience.
Timm said Kohl’s customers expect it to deliver the products they need for themselves, their families and their homes, so the company is working to rebalance the full product assortment across all categories.
In one move advancing its priorities, Kohl’s recently introduced three new home brands, Mariana, Motelier, and Mingle and Co., Timm pointed out, generating a strong initial response that helped improve performance in bedding, bath and tabletop segments. However, she maintained that home as a category underperformed in the first quarter.
In addition, Timm noted that the company will debut 105 Sephora small-format in-store shops this spring, completing the full planned rollout of the nameplate within Kohl’s locations. She characterized the Sephora initiative as a “huge success,” as Kohl’s looks forward to completing a 1,100-shop rollout in only four years. In the first quarter, Sephora delivered a 6% net sales gain and comparable sales growth of 1%.
In the conference call, Michael Bender, Kohl’s Interim CEO, said that the company has reaffirmed its full year guidance based on confidence that it can manage tariff-related costs, as the company can anticipate them right now.
In announcing the company’s financial results, Bender said, “Our first quarter performance was ahead of our expectations and the actions we are taking are starting to make progress with early signs of a positive impact. Our team is focused and motivated to deliver great products, great value and a great shopping experience to our customers.”
