Mixed Q1 Results for Kohl's (KSS)

Kohl's Corporation (NYSE:KSS) has reported its first quarter fiscal 2024 financial results, and the numbers show a mixed bag of performance.

Net sales for the first quarter ended May 4, 2024, decreased by 5.3% compared to the same period last year, amounting to $3.2 billion, with comparable sales also down by 4.4%. However, regular price sales saw a 2.4% increase, although clearance sales impacted the overall comparable sales by more than 600 basis points.

On the positive side, gross margin as a percentage of net sales increased by 48 basis points, reaching 39.5%. The company also managed to decrease its inventory by 13% to $3.1 billion, indicating effective inventory management.

However, the bottom line was not as favorable, with Kohl's reporting a diluted loss per share of $0.24, a stark contrast to the net income of $0.13 per diluted share in the prior year.

Operating income for the first quarter stood at $43 million, a significant decrease from the $98 million reported in the prior year, with operating income as a percentage of total revenue decreasing by 148 basis points year-over-year to 1.3%.

The company's operating cash flow also saw improvement, with a use of $7 million compared to a use of $202 million in the prior year.

Looking ahead to the full year 2024, Kohl's has updated its financial and capital allocation outlook, anticipating a decrease in net sales of 2% to 4% and a decrease in comparable sales of 1% to 3%. The company also expects an operating margin in the range of 3.0% to 3.5% and diluted earnings per share in the range of $1.25 to $1.85.

Kohl's is also committed to returning capital to shareholders through a quarterly cash dividend of $0.50 per share, payable on June 26, 2024, to shareholders of record at the close of business on June 12, 2024. Additionally, the company is focused on strengthening its balance sheet through long-term debt reduction, as evidenced by the redemption of $113 million of its 9.500% notes due May 15, 2025.

The market has reacted to these announcements by moving the company's shares -23.8% to a price of $20.76. Check out the company's full 8-K submission here.

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