Kohl’s Jumps 10.6% on Outstanding Q3 Results

Shares of department store retail chain operator Kohl’s Corp. (KSS) jumped 10.6% on Thursday to close at $62.48 after the company reported outstanding financial results for the third quarter of 2021.

Based out of Wisconsin, Kohl’s stores offer apparel, shoes, accessories and home & beauty products, among others.

Q3 Results

The company posted record adjusted earnings of $1.65 per share, compared to $0.01 per share reported last year and the Street’s estimate of $0.61 per share.

Total revenue increased 15.6% year-over-year to $4.6 billion, just above analysts’ expectations of $4.27 billion.

Gross margin climbed 408 basis points to 39.9%. (See Insiders’ Hot Stocks on TipRanks)

CEO Comments

The CEO of Kohl’s, Michelle Gass, said, “Our strategic efforts to transform Kohl’s into the leading destination for the active and casual lifestyle continue to build momentum. We delivered another quarter of record earnings with both sales and margins exceeding expectations.”

“All of the pieces of our strategy are coming together and we remain incredibly confident in the future of our business. We are raising our full-year 2021 guidance and continue to accelerate our share repurchase activity, reinforcing our commitment to driving shareholder value.”

Outlook

The company now expects net sales to grow in the mid-twenties percentage range against the earlier guidance of low-twenties percentage.

Operating margin is anticipated to lie in the range of 8.4% to 8.5%, compared to the previous projection of 7.4% to 7.6%.

Further, the company expects adjusted earnings per share (EPS) to come in between $7.10 and $7.30, compared to the previous range of $5.80 to $6.10.

Analyst Recommendation

Overall, the stock has a Hold consensus rating based on 3 Buys, 2 Holds and 2 Sells. The average Kohl’s price target of $64.14 implies 2.7% upside potential. Shares have gained 114.2% over the past year.

Risk Analysis

According to the TipRanks’ Risk Factors tool, Kohl’s is at risk mainly from one factor: Ability to Sell, which accounts for 27% of the total 22 risks identified for the stock.

Under the Ability to Sell risk category, the company has six risks, details of which can be found on the TipRanks website.