Menomonee Falls, Wis. – Bedding, rugs and pillows as well as luggage and electrics all drove home’s strength during the third quarter at Kohl’s, which otherwise produced a mixed bag of mostly soft results. Worse, Kohl’s is now projecting a sales decline for the fourth quarter.
Net income for the third quarter declined 18% to $177 million, or $.81 earnings per share. Sales edged up 1% to $4.4 billion versus $4.5 billion, and comparable stores sales dipped 1.6% compared to last year’s 1.1% comp gain.
E-commerce dulled in the quarter, increasing 15%, which is lower than Kohl’s historical growth rate, although the company said the pace of in line with expectations.
“We fully expect our e-commerce sales to accelerate in the fourth quarter, now that the re-platform is completed,” said Kevin Mansell, chairman, president and ceo.
As Kohl’s readies for the holiday season, Mansell said, the company has increased its marketing spending “and improved its impact and reach in order to drive higher traffic to our stores and on-line.”
Year to date results included: a 9% drop in net income to $555 million, or $2.51 diluted EPS; flat net sales of $12.9 billion; and a 0.9% comp decline, essentially on par with the year ago period.
Kohl’s has increased its store count this year to 1,158 units in 49 states, compared to 1,146 stores in the same time last year. The company opened three new stores during the third quarter and nine new stores during the first quarter of 2013. Additionally, Kohl’s has remodeled 30 stores this year.
For the fourth quarter, Kohl’s expects a sales decline of 2% to 4% and comparable store sales declines of 0% to 2%.
The company also lowered its annual earnings per share guidance to $4.08-$4.23 from $4.15-$4.35.
Kohl’s may be expecting a tough year ago. The company announced it will no longer issue guidance for quarterly periods and will only provide guidance on an annual basis.