Why Retailer Kohl's Shares Are Declining Today

Kohl's Corp KSS shares are trading lower by around 12% after it posted Q3 FY23 results.

Revenue declined 5.2% Y/Y to $3.84 billion, missing the analyst consensus of $4.11 billion. Comparable sales decreased 5.5%.

EPS of $0.53 beat the consensus estimate of $0.33. Gross margin for the quarter expanded 158 basis points to 38.9%. 

Operating income for the quarter was $157 million versus $200 million last year. The operating margin contracted 82 basis points to 3.9%.

Selling, general and administrative expenses increased 1.9% Y/Y to $1.4 billion. Inventory at the end of Q3 was $4.2 billion, a decrease of 13% Y/Y.

Kohl's held $190 million in cash and cash equivalents as of October 28, 2023. Operating cash flow was $379 million in the quarter.

On November 7, 2023, Kohl's Board declared a quarterly cash dividend of $0.50 per share, payable on December 20, 2023, to shareholders of record on December 6, 2023.

Outlook: Kohl's revised outlook for FY23 sales to a decline of 2.8% - 4% (from 2% - 4% decline earlier), EPS, excluding any non-recurring charges, to $2.30 -$2.70 (from $2.10 - $2.70) versus the Street view of $2.41.

KSS continues to project an FY23 operating margin of 4% and sees capital expenditures towards the lower end of the prior outlook of $600 million-$650 million, including expansion of its Sephora partnership and store refresh activity.

Price Action: KSS shares are down 12.45% at $21.76 on the last check Tuesday.

Photo Via Company