Kohls posts Q1 profits after prior slump
Kohl’s posted a surprise profit for the fiscal first quarter, helped by the department store chain’s moves to cut inventory by 6% in the wake of weak sales, the Associated Press reports. Kohl’s said that it continued to see sales momentum with its Sephora beauty shops.
The company, based in Menomonee Falls, also affirmed its annual financial guidance, pushing up shares 11% higher in premarket trading yesterday.
The moves come after the department store chain said in early March that it planned to cut inventory this year by 5%, be more surgical with discounts, and change how it showcases its merchandise after the department store chain reported a big loss and a sales slump in the fourth quarter.
Kohl’s reported net income of $14 million, or 13 cents per share, in the three-month period ending April 29 compared with $14 million, or 11 cents per share, in the year-ago period. Total sales slipped to $3.57 billion from $3.71 billion in the period.
Kohl’s is the first major department store to report fiscal first quarter results, but overall the latest reports underscore a slowdown in consumer spending, particularly in clothing and other non-discretionary items as shoppers wrestle with inflation.
Target last week reported another quarterly profit decline and issued a cautious sales and profit outlook for the current period. Walmart reported strong first-quarter sales results as the nation’s largest retailer’s low prices continue to draw budget conscious consumers in a challenging economic environment.