Bigger is better

19 Nov 2019 By Amanda Gomez Follow @alpgomez

Investors torched a fifth of the retailer’s market value after it missed earnings and cut its outlook. CEO Michelle Gass’s partnership with the e-commerce giant isn’t helping. Its small size and store locations leave Kohl’s too exposed to the power Amazon wields.

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Kohl’s on Nov. 19 reported revenue of $4.6 billion for the quarter ended Nov. 2, down 0.1% compared with the same period last year. Net income declined 24% to $123 million. Earnings per share of 74 cents missed the mean estimate of sell-side analysts of 86 cents, according to Refinitiv data.

Same-store sales increased 0.4% for the three months, compared with a 2.5% increase in last year’s third quarter. Analysts were expecting an increase of 0.8%.

The retailer lowered its estimate for full-year adjusted earnings to a range of $4.75 to $4.95 per share, compared to its prior outlook of $5.15 to $5.45 per share.

On the same day, TJX reported net sales, which exclude discounts, sales taxes and estimated returns, of $10.5 billion. Net income increased nearly 9% to $828 million. Same-store sales were up 4%, compared with a 7% increase last year.

Kohl’s stock was down more than 18% to $47.75 a share at 10:51 a.m. in New York. TJX stock was up almost 1% to $60.09 per share.

The U.S. Census Bureau on Nov. 19 reported a 5% increase in e-commerce sales for the third quarter of 2019 to $156 billion. As a result, online shopping accounted for 11.2% of total sales, compared with 10% in the same quarter last year. Total retail sales were up 1.4%.

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Same-store sales increased 0.4% for the three months, compared with a 2.5% increase in last year’s third quarter. Analysts were expecting an increase of 0.8%.

The retailer lowered its estimate for full-year adjusted earnings to a range of $4.75 to $4.95 per share, compared to its prior outlook of $5.15 to $5.45 per share.

Kohl’s stock was down more than 18% to $47.75 a share at 10:51 a.m. in New York. TJX stock was up almost 1% to $60.09 per share.

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