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Kohl's Q4 Results Beat Estimates, But Sees 2013 Earnings Below View


Department store chain Kohl's Corp. (KSS) on Thursday reported a 17 percent decline in profit for the fourth quarter as higher revenues were offset by lower margins and an increase in expenses. However, both revenues and earnings per share beat analysts' expectations.

In addition, the company increased its quarterly dividend by 9 percent. Looking ahead, the company forecast earnings fiscal 2013 below analysts' estimates.

Kevin Mansell, Kohl's chairman, president and chief executive officer, said, "Sales for the fourth quarter developed very late and, as a result, came at a cost to profitability. We were, however, able to end the quarter with levels of inventory appropriate for a strong transition to Spring."

Menomonee Falls, Wisconsin-based Kohl's net income for the fourth quarter was $378 million or $1.66 per share, down from $455 million or $1.81 per share in the year-ago period. On average, 19 analysts polled by Thomson Reuters expected earnings of $1.63 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 5 percent to $6.34 billion from $6.02 billion in the year-ago period and beat analysts' consensus revenue estimate of $6.24 billion.

Comparable store sales for the quarter increased 1.9 percent. Comparable store sales or comps is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.

Gross margin declined to 33.3 percent from 36.2 percent in the prior-year period.

Kohl's ended the quarter with 1,146 stores in 49 states, compared with 1,127 stores at the same period last year. During the year, the company opened 21 new stores, including 1 relocated store, closed 1 store and completed 50 remodels.

On February 27, Kohl's board of directors declared a quarterly cash dividend of $0.35 per share, representing a 9 percent increase over the prior dividend of $0.32 per share. The dividend is payable March 27 to shareholders of record at the close of business on March 13.

For fiscal 2012, Kohl's net income declined to $986 million or $4.17 per share from $1.17 billion or $4.30 per share in the prior year. However, net sales increased 3 percent to $19.28 billion from $18.80 billion last year. Comparable store sales for the year edged up 0.3 percent.

Street expected the company to report earnings of $4.14 per share on revenues of $19.22 billion.

Looking ahead to the first quarter, Kohl's forecasts earnings per share in a range of $0.55 to $0.63 per share, based on assumptions of a total sales increase of 0.5 to 2.5 percent and comparable store sales growth of 0 to 2 percent. Analysts expect the company to earn $0.62 per share for the quarter on revenues of $4.30 billion.

For fiscal 2013, Kohl's forecast earnings per share of $4.15 to $4.45, based on assumptions of total and comparable-store sales increases of 0 to 2 percent. Street expect earnings of $4.56 per share for the year on revenues of $19.50 billion.

KSS closed Wednesday's trading at $46.61, down $0.97 on a volume of 2.86 million shares.

by RTTNews Staff Writer

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