-=Kohl's (KSS) reported earnings on Thur 20 May 21 (b/o)

 

Kohl's beats by $1.17, beats on revs; raises FY22 EPS and revs

Reports Q1 (Apr) earnings of $1.05 per share, $1.17 better than the S&P Capital IQ Consensus of ($0.12); revenues rose 60.1% year/year to $3.89 bln vs the $3.35 bln S&P Capital IQ Consensus.

Co issues guidance for FY22, sees EPS of $3.80-4.20 vs. $2.82 S&P Capital IQ Consensus, and above prior guidance of $2.45-2.95; sees FY22 revs of mid-to-high teens percentage growth vs. +17% yr/yr or $17.56 bln S&P Capital IQ Consensus. This is up from previous expectation of mid-teens percentage rate increase.

Kohl's making 12-week lows despite reporting surprise Q1 profit, upbeat sales & lifting FY22 guidance 

Possibly, investors are a bit perplexed by the company's FY22 EPS guidance of $3.80-4.20 (from $2.45-2.95).

• The guidance came in below pre-pandemic FY19's $4.86 result, a possible sign that the company still sees some residual impact from the pandemic for the remainder of the year.
• Some on Wall Street have pointed out that most of the guidance increase stems from the Q1 performance, and not solely from improving business trends.

This morning, Telsey Advisory Group's Dana Telsey said, "Overall, Kohl's, like most retailers, benefited from a favorable consumer environment in the first quarter against much easier prior year compares. The company drove outsized performance across the board in 1Q21 as the macro environment continued to improve following the broader vaccine rollout, return of warmer weather, and another round of government stimulus payments. Following the strong start to the year, the company raised its FY21 guidance, coming in ahead of the market's expectations, though still below the pre-pandemic FY19 levels. Overall, the upcoming Sephora partnership can drive accretion over a longer-term basis as the company continues to improve the relevancy of its offering across categories, and its advantaged off-mall footprint can support both digital and physical growth. However, with an elevated valuation against improved visibility to FY21 earnings, we maintain our Market Perform rating at current levels."

Further, Telsey added, "Altogether, the company now sees FY21 EPS coming in at $3.80-$4.20 (up from $2.45-$2.95), as compared to ($1.21) last year, $4.86 in FY19, and the prior consensus forecast of $3.15. At the mid-point, the new guidance range represents an increase of $1.30 from prior expectations, of which nearly $1.00 reflects the first quarter outperformance."

Department store peers lower include: JWN -5.87%, M -4.55%, DDS -0.45%.

\