Kohl's Sacrifices Its Margins for Anemic Comps Growth
Kohl's (NYSE: KSS) was once considered a brick-and-mortar survivor -- it wasn't attached to sickly malls, rotated its products quickly, and kept its inventories low. Unfortunately, its recently released third-quarter report indicates that it might just be experiencing a slower death.
During the quarter, Kohl's revenue stayed nearly flat year-over-year at $4.63 billion and beat estimates by about $230 million, but its net income fell 24% to $123 million. On a non-GAAP basis, its net income declined 28% to $116 million as its EPS dropped 24% to $0.74, which missed estimates by $0.12.
Kohl's didn't provide any revenue guidance for the full year, but it cut its adjusted EPS forecast from $5.15-$5.45 to just $4.75-$4.95, which equals a 12%-15% drop from 2018. That downbeat forecast, which caused Kohl's stock to plunge nearly 20% on Nov. 19, indicates that Kohl's is sacrificing its margins to stay afloat.
Source Fool.com
