Kohl’s shares fell Thursday despite the company reporting earnings and sales for the fiscal quarter that exceeded expectations and exceeded guidance for the full year. A similar trend followed at Target and Lowe’s, both of which reported strong earnings results the previous day and watched their respective stocks lose momentum over the course of the day. Some investors are cautious given the strong demand resulting from the continuation of the pandemic, especially as stimulus checks are issued.
However, executive director Michelle Gass said the momentum had picked up throughout the quarter, particularly in Kohl’s stores, where the retailer had invested in new private labels and refreshing displays for active wear, womenswear and beauty.
“Given last year’s dire results, good growth has always been inevitable,” Saunders said of Kohl’s time his stores closed during the health crisis. “While the company is on a steep recovery path, it hasn’t completely dug its way out of the hole that caused the pandemic.”
Michelle Gass, executive director of Kohl, said the momentum had increased throughout the quarter, particularly in stores where the retailer had invested in new private labels and refreshing displays for active wear, womenswear and beauty. According to Gass, activewear sales saw the most significant growth in the first quarter, increasing by a percentage by mid-teens from 2019.
“The US consumer is in a stronger position [and] Spending has increased, fueled by incentives, easing Covid-19 restrictions and resuming normalcy in their daily lives, ”Gass said during a earnings call. “These factors are helping to reinvigorate retail growth and we are very well positioned to benefit from this acceleration.”
Later in the fall, Kohl’s is preparing to bring beauty retailer Sephora to about 200 of its stores and grow to 850 locations by 2023. The company hopes the initiative will help increase traffic and reach a younger customer. At the same time, the company has expanded its list of national brand partners, including Levi’s, Lands’ End and Eddie Bauer.
Following the recent debut of the new active line FLX, the company is preparing to launch another group of private labels. Kohl’s is well on the way to expanding its active business to 30% of total sales in the next few years.
At the close of the market on Thursday, Kohl shares had risen by more than 33% since the beginning of the year. Kohl’s has a market cap of $ 8.5 billion, which is significantly more than Macy’s and Nordstrom’s.