Kohl’s Corporation (NYSE:KSS) has reported its financial results for the second quarter ended August 3, 2024, and the six months fiscal year 2024. The company experienced a 4.2% decrease in net sales and a 5.1% decrease in comparable sales. However, there was an increase of 59 basis points in gross margin and a 13% increase in diluted earnings per share compared to the prior year.
In terms of specific figures, net sales for the second quarter were $3.5 billion, with gross margin at 39.6% of net sales. Selling, general & administrative (SG&A) expenses decreased 4.2% year-over-year to $1.2 billion, and operating income was $166 million, representing a 26 basis point increase year-over-year. Net income for the quarter was $66 million, or $0.59 per diluted share, compared to $58 million, or $0.52 per diluted share in the prior year. Inventory decreased by 9% year-over-year to $3.2 billion, and operating cash flow was $254 million, down from $430 million in the prior year.
For the six months fiscal year 2024, net sales decreased 4.7% year-over-year to $6.7 billion, with comparable sales down 4.8%. Gross margin as a percentage of net sales was 39.6%, representing an increase of 54 basis points. SG&A expenses decreased 2.5% year-over-year to $2.5 billion, while operating income was $209 million, down from $261 million in the prior year. Net income was $39 million, or $0.35 per diluted share, compared to $72 million, or $0.65 per diluted share in the prior year. Operating cash flow was $247 million, up from $228 million in the prior year.
Looking ahead, Kohl’s updated its 2024 financial and capital allocation outlook, with expectations including a decrease of (4%) to a decrease of (6%) in net sales, a decrease of (3%) to a decrease of (5%) in comparable sales, and diluted earnings per share in the range of $1.75 to $2.25. The company also plans to allocate approximately $500 million in capital expenditures, including the expansion of its partnership with Sephora and other store-related investments.
Kohl’s will host its quarterly earnings conference call at 9:00 am ET on August 28, 2024, where further details on the financial results and outlook are expected to be discussed. The market has reacted to these announcements by moving the company's shares 0.5% to a price of $19.7. For more information, read the company's full 8-K submission here.
