Home Kohl’s Touts Home Products, Babies“R”Us Partnership After Turning Q4 Profit
March 12, 2024

Kohl’s Touts Home Products, Babies“R”Us Partnership After Turning Q4 Profit

Posted In: Retail Articles

By: Mike Duff

Contributing Editor

Kohl’s Corp. beat Wall Street estimates despite negative comps as the company advances initiatives, including expansion of its Sephora business, rejuvenation of home and gifting categories and a partnership to launch Babies”R”Us departments. 

The company revealed a partnership with WHP Global, owner of the Babies“R”Us brand. The first Babies“R”Us shops (rendering pictured above) will open in Kohl’s in August, and plans call for a rollout of the operation to about 200 Kohl’s stores in the fall. Customers will be able to shop an expanded assortment of baby products on Kohls.com while taking advantage of a Babies“R”Us selection on Kohl’s registry.

Kohl’s net income for the 14-week fourth quarter was $186 million, or $1.67 per diluted share, versus a net loss of $273 million, or $2.49 per diluted share, in the 13-week previous-year period, the company noted.

Kohl’s beat a Yahoo Finance-published analyst average estimate of $1.28 for diluted earnings per share and $5.7 billion for revenues.

Comparable sales, which measured the 13-week quarter ending January 27, 2024, versus the 13-week period ended January 28, 2023, decreased 4.3% year over year. Fourth quarter net sales decreased 1.1% year-over-year, to $5.71 billion from the year-prior quarter. The fiscal 2024 fourth period included net sales of $164 million from the 14th week. Total revenue was $5.96 billion versus $6.02 billion in the year-earlier period. Operating income was $299 million compared to a $302 million loss in the quarter a year past.

Net income for the full year was $317 million, or $2.85 per diluted share, versus a net loss of $19 million, or 15 cents per diluted share, in the year before. Net sales were $16.59 billion versus $17.16 billion in the year prior, Kohl’s maintained. Total revenue was $17.48 billion versus $18.1 billion in the year earlier. Operating income was $717 million versus $246 million in the year past.

In an investor’s presentation, Kohl’s noted customers have had a strong response to the company’s recent efforts to grow home-related operations in categories including ceramics, glassware, seasonal decor, storage and pet. The company also noted Kohl’s has become a full-year gifting destination and expects that business to grow in 2024.

In announcing the financial results, Tom Kingsbury, Kohl’s CEO, said, “(Last year) represented an important year for Kohl’s. We enhanced our store experience, expanded our partnership with Sephora and invested in underpenetrated categories. We also simplified our value strategies and implemented new inventory management processes. The early success of our strategies is evident. Our store business had its best comparable sales performance since 2010, Sephora at Kohl’s continued to drive meaningful beauty sales growth, and we managed inventory down 10% at year end. Looking ahead, we are incredibly focused on delivering comparable sales growth in 2024. Our strategic initiatives are positioned to build momentum and contribute more meaningfully, and we will partner with Babies“R”Us to meaningfully expand our presence in the baby gear category which represents a compelling white space opportunity for Kohl’s. Through our collective efforts, Kohl’s is becoming more relevant to customers, which strengthens our conviction in our longer-term opportunity.”

In the WHP deal, Babies“R”Us shops inside Kohl’s will range from 750 to 2,500 square feet of space featuring baby gear, activity, bath, furniture, feeding and safety products. In addition, Kohl’s registry will become the exclusive retail destination for the Babies“R”Us.

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