Kohl’s Delivers Strong Q2 Results, Lifts Guidance for 2021

Shares of omnichannel retailer Kohl’s Corp. (KSS) climbed 4.6%, at the time of writing, in early trade on Thursday, on the back of strong second-quarter 2021 results. The company’s revenues and earnings surpassed the Street’s expectations on improvement in sales.

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Adjusted earnings of $2.48 per share surpassed analysts expectations of $1.11 per share. The company had reported a loss of $0.25 per share in the second quarter of 2020.

Kohl’s net sales of $4.22 billion exceeded the consensus estimates of $3.99 billion. Further, the company’s top line climbed about 31.4% year-over-year.

Notably, the company was able to maintain liquidity in the second quarter. Cash & cash equivalents stood at $2.6 billion, compared to $2.4 billion in the year-ago quarter.

Kohl’s repurchased $255 million shares during the reported quarter and seeks to buy back a total of $500 to $700 million shares in 2021. (See Kohl’s stock charts on TipRanks)

The CEO of Kohl’s, Michelle Gass, said, “As pleased as we are with our ongoing strategic progress, much of our opportunity is still ahead of us. We are on the eve of launching several transformational partnerships that will drive sustainable growth for years to come.”

Supported by an upbeat performance in the first half of 2021, Kohl’s has raised guidance for full-year 2021. The company expects its net sales to increase in the low-twenties percentage range, up from mid-to-high teens percentage range guided earlier. Further, it anticipates EPS to be in the range of $5.80 to $6.10 against the prior expectation of $3.80 to $4.20.

On August 9, Jefferies analyst Stephanie Wissink assigned a Buy rating to the stock with a price target of $71 (upside potential of 34.3%).

Wissink said, “We believe KSS’s sales, margin, and store experience initiatives, in addition to the relative resilience of its off-mall real estate and a degree of pent-up consumer shopping demand, will drive a faster and more measurable EBITDA recovery than the market expects.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 4 Buys and 2 Holds. The average Kohl’s price target of $68.67 implies 29.2% upside potential.

KSS scores a 9 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to outperform market averages.