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Beauty trends Kohl’s Delivers a Strong Finish to the Fiscal Fourth Quarter


Beauty Trends

Beauty trends Kohl’s Delivers a Strong Finish to the Fiscal Fourth Quarter

Click here for a message from The Motley Fool Co-founders Tom and David Gardner. Strong traffic trends in January made up for the weak sales performance during the holidays. Kohl’s (NYSE:KSS) announced better-than-expected earnings on Tuesday for the fiscal fourth quarter. While comparable store sales were flat, investors were pleased to see a big beat in profits, which…

Beauty trends Kohl’s Delivers a Strong Finish to the Fiscal Fourth Quarter

Beauty trends

Click here for a message from The Motley Fool Co-founders Tom and David Gardner.

Beauty trends Strong traffic trends in January made up for the weak sales performance during the holidays.

beauty trends John Ballard

Kohl’s (NYSE:KSS) announced better-than-expected earnings on Tuesday for the fiscal fourth quarter. While comparable store sales were flat, investors were pleased to see a big beat in profits, which pushed the shares up 3% Tuesday morning. 

Net sales were $6.83 billion, which beat the consensus analyst estimate of $6.52 billion, while non-GAAP (adjusted) earnings came in at $1.99, beating estimates by $0.11.

beauty trends A few people strolling past a Kohl's store.

Image source: Kohl’s. 

Beauty trends Traffic improving

When Kohl’s announced its holiday sales results in January, management cited momentum in the digital business, activewear, beauty, children’s, footwear, and men’s categories. However, softness in women’s, which is Kohl’s largest business line, was the main culprit for a decrease in comps of 0.2% in November and December.

It’s getting tough for traditional retailers to increase shares of consumer discretionary spending. Kohl’s has been gradually de-emphasizing proprietary brands in favor of “national” brands, like Adidas and Champion in activewear, to boost traffic. CEO Michelle Gass credited this strategy for accelerating traffic trends toward the end of the quarter, which ended Feb. 1.

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“We are encouraged by the acceleration of traffic and new customer acquisition in our stores and online driven by the unprecedented level of new brands and partnerships we launched during the year,” Gass said. 

Beauty trends Still work to do

There’s nothing new with management’s early outlook for fiscal 2020. Comp sales growth is expected to be anywhere from down 1% to up 1%. Gross margin is expected to decline by 10 to 20 basis points. Kohl’s previously cited aggressive pricing to combat competition for its lower gross margin in the third quarter. 

The stock is bouncing higher partly because it had fallen so sharply in recent months. But the guidance for 2020 shows Kohl’s is still not out of the woods yet.


John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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