Kohl’s Corp (KSS.N) announced an unexpected profit on Wednesday as its new CEO’s efforts to cut inventory and costs paid off, driving its shares up 12%.
Despite a larger-than-expected quarterly comparable store sales decrease, the firm maintained its full-year forecasts.
Under February CEO Tom Kingsbury, the department retailer is trying to turn back. Instead, Instead, Kohl’s focuses on workwear and lowers its reliance on margin-sapping discounts to clear inventory to boost sales and earnings.
Kohl’s first-quarter gross margin increased by 67 basis points as it reduced inventory by 6%.
Operating expenses declined 4.2% to $1.2 billion, while earnings per share were 13 cents, compared to analysts’ average loss of 42 cents.
According to Refinitiv IBES data, Kohl’s first-quarter comparable sales fell 4.3%, compared to analysts’ average forecast of 3.9%. Cost-of-living concerns have affected discretionary customer spending.
It maintained its fiscal 2023 profits per share at $2.10–$2.70 and its operating margin at 4%.
