Kohl's Q4 Highlights: Earnings Beat, Sales Dip, Expanding Margins & More

Kohl’s Corp KSS reported a fourth-quarter FY23 sales decline of 1.1% year-on-year to $5.71 billion, beating the analyst consensus estimate of $5.70 billion.

Comparable sales for the quarter decreased 4.3%. Gross margin for the quarter expanded by 937 basis points to 32.4%.

Operating income for the quarter was $299 million versus $(302) million loss last year. The operating margin expanded 1,005 basis points to 5%.

Selling, general and administrative expenses decreased 4% Y/Y to $1.6 billion. EPS of $1.67 beat the analyst consensus estimate of $1.28.

Inventory at the end of the quarter was $2.9 billion, a 10% decrease Y/Y.

Kohl’s held $183 million in cash and equivalents as of February 3, 2024. Operating cash flow was $789 million in the quarter.

On February 28, 2024, Kohl’s Board declared a quarterly cash dividend on the common stock of $0.50 per share. The dividend is payable on April 3, 2024, to shareholders of record at the close of business on March 20, 2024.

“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,” said CEO Tom Kingsbury.

Outlook: Kohl’s expects FY24 sales growth of (1)% – 1%. It expects FY24 EPS, excluding any non-recurring charges, of $2.10 – $2.70 versus the Street view of $2.61.

Kohl’s expects an FY24 operating margin of 3.6% – 4.1% and capital expenditures of about $500 million, including expansion of its Sephora partnership and other store-related investments.

Price Action: KSS shares are trading lower by 1.10% at $26.89 in premarket on the last check Tuesday.

Photo via Wikimedia Commons