MENOMONEE FALLS, Wis. — Sales and earnings were disappointing at Kohl's, but the retailer remains optimistic heading into the fall.
The retailer reported second quarter net income of $240 million, or $1 per diluted share, compared with $299 million, or $1.08 per diluted share, a year ago. Net sales were $4.2 billion, a decrease of 1% for the quarter. Comparable-store sales for the quarter decreased 2.7%.
Kevin Mansell, Kohl’s chairman, president and CEO, said, “Our sales performance in the second quarter was disappointing. Our gross margin performance for the quarter, however, was better than expected. Our teams remain disciplined in their expense management and, again, delivered solid results. We accomplished our goal of improving inventory levels for the fall season and our sales improved considerably in July as units were received. As we look forward to the fall season, we are excited about the fashion content and level of newness in our assortments.”
By the end of the quarter, Kohl's operated 1,134 stores in 49 states, compared with 1,097 stores at the same time last year. During the first half of the year, the company opened 9 new stores, including 1 relocated store, closed 1 store and completed 40 remodels. The company expects to open an additional 12 stores and complete an additional 10 remodels in September.
Kohl's expects earnings for the third quarter to range from 83 cents to 89 cents per diluted share, based on expected sales growth of 1% to 3% and comparable-store sales growth of flat to 2%. After incorporating its second quarter results and third quarter outlook, the company now expects to earn $4.50 to $4.65 per diluted share for fiscal 2012 versus its previous guidance of $4.75 per diluted share.