Kohl’s plans to close a small fraction of stores
Kohl’s Corp. may have met analysts’ fourth-quarter forecasts, despite an overwhelming tough holiday for retail at large, but investors were hung up on management’s soft 2016 outlook.
Kohl’s plans to pilot a new smaller format Kohl’s store in fiscal 2016 and add two off-aisle pilot stores in Wisconsin.
He said the stores that will be closed account for less than 1% of the company’s sales. “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 reported adjusted earnings of $4.01 per share, easily beating the Zacks Consensus Estimate of $3.97 by 1%. The company plans $600 million in share repurchases at an average price of $50 per share. Revenue for the quarter totaled $6.4 billion, up from $6.3 billion in 2014, and meeting the FactSet consensus. For the year, Kohl’s expects sales to be between down 0.5 percent and up 0.5 percent, compared with analyst estimates for 1 percent growth, according to Thomson Reuters.
The company will release a list of the underperforming locations it will close at the end of March.
The company has locations 1,160 locations nationwide.
In that shifting retail environment, Kohl’s, Macy’s and other department stores are expanding online, another place where shoppers have migrated, and they’re launching their own cut-price stores.
Kohl’s stores in Northeast Ohio include locations in Akron, Aurora, Avon, Fairview Park, Highland Heights, Kent, Lorain, Macedonia, Medina, Mentor, North Canton, Parma, Stow, Strongsville, Wadsworth and Wooster.
Kohl’s, which is known to be the most weather-sensitive among department store operators, also said winter storm Jonas in January was a $20 million hit to sales. Total sales are expected to fall year over year, Kohl’s said in its financial statement.