Kohl's Posts Lower Profit, Cuts Forecast
Kohl's, a mid-priced retailer of apparel and home goods, reported a 14 percent drop in third-quarter profit as sales fell short of analysts' estimates, and cut its earnings forecast for the
holiday selling season and full year.
The company's shares were down more than 2 percent in extended trading.
Net income fell to $194 million, or 61 cents a diluted share, for the third quarter ended Nov. 3, from $224.5 million, or 68 cents a share, in the year-ago period.
Total sales rose about 5 percent to $3.8 billion, below analysts' estimates of $3.9 billion, according to Reuters Estimates. Sales at stores open at least a year fell 2.6 percent.
In a statement, Kohl's said its sales reflected a "difficult overall environment."
The company in recent months cited pressure on its business from the weak U.S. housing market and promotions from rivals, and earlier this month slashed its earnings estimates for the third quarter.
Retail watchers have expressed concern about the impact the slumping housing market and higher food and gasoline prices could have on consumer spending heading into the holiday season.
The sales of Kohl's department store rivals have also suffered as consumers wrestled with these factors.
Retailer J.C. Penney earlier on Thursday posted a 9 percent drop in quarterly profit and cut its holiday forecast. Its chief financial officer said during a conference call that promotional activity would likely increase.
On Wednesday, Macy's also cut its sales forecast for the current
quarter and full-year.
Earlier this month, Kohl's reported October same-store sales that were weaker than expected, hurt by unseasonably warm weather and the resulting poor sales of cold-weather gear. Its same-store sales also fell in September and August.
Kohl's said it now expects fourth-quarter profit of $1.45 to $1.51 a share, assuming same-store sales that are flat to down 2 percent. In August, the retailer had forecast fourth- quarter earnings of $1.63 to $1.69 a share.
The chain said full-year profit was expected to be $3.52 to $3.58 a share, down from its previous forecast of $3.77 to $3.87 a share.
Analysts expected profit of $1.58 a share for the fourth quarter and $3.64 a share for the year, according to Reuters Estimates.
Kohl's shares were down 2.9 percent at $47.50 in extended trading from their $48.92 close on the New York Stock Exchange.