PreMarket Prep Stock Of The Day: Kohl's

The impressive earnings reports from much of the retail sector keep on coming. Before the open Thursday, Kohl’s Corp KSS joined the party with its third-quarter results, making it the PreMarket Prep Stock of the Day.

Impressive Rally Ahead Of The Report: Kohl’s bottomed Oct. 12 at $43.67 and embarked on a major move higher. It paused at the $50 area in late October and the move continued.

Until Thursday’s price action, the high for the move was $60.52 and the highest close for the move was at $59.56.

Profit-Taking Ahead Of The Report: After such an unusual move, there was some profit-taking in the issue beginning Nov. 10. The issue was lower in five of the next sessions, with the most damage coming on Wednesday.

During that session, the low for the retreat ($55.18) and lowest close ($56.48) were established.

The Kohl's Q3 Report: Just after 7 a.m. EST, the company reported quarterly earnings of $1.65 per share, which beat the analyst consensus estimate of 64 cents per share by 157.81%. This is a 16,400% increase over earnings of 1 cent per share from the same period last year.

The company reported quarterly sales of $4.6 billion, which beat the analyst consensus estimate of $4.27 billion by 7.73%. This is a 15.61% increase over sales of $3.98 billion in the same period last year.

Also, the company raises FY21 EPS guidance from a range of $5.80-$6.10 to $7.10-$7.30 and raised sales growth expectations from the low-20s percentage range to the mid-20s percentage range.

PreMarket Prep's Take: The overall outlook for the retail sector was discussed on Thursday’s show. Co-host Dennis Dick noted that “November was the best month to own retail stocks, based on seasonality.”

He's “not chasing the gap and [going in on] Kohl’s today, but I am going to be looking at it on a pullback,” Dick said. 

KSS Price Action: Following a much higher open ($62.01 vs. $56.48), the issue went on to peak at $62.26 and reversed course Thursday.

The ensuing decline took the issue beyond the top of Wednesday’s range ($59.18), but found buyers well ahead of the close at $58.17 and has rebounded.

As of 3:40 p.m., it's up 9.95% at $62.19. 

The full discussion on the retail sector from Thursday’s show can be found here: