Kohl's (KSS) earnings report review for the 2nd quarter of their 2021 fiscal year
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Category: Stock Market and Kohl's (KSS)
Date: 21 August 2021 Stock Price of Kohl's (KSS): $57.24 Market Capital of Kohl's (KSS): $8.94 billion We take a look at the 2nd quarter 2021 earnings report of Kohl's one of the largest retailers in the United States with over 1 100 stores in 49 states. Revenue for the quarter came in at $4.44 billion up 35% compared to the same quarter of the previous year and they made a profit of $382 million.
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Our performance in the second quarter marked another important step in further establishing Kohl’s as the leading destination for the active and casual lifestyle. We delivered record second quarter earnings with sales and margins materially exceeding expectations. - Michelle Gass, Kohl’s chief executive officer."
About Kohl's
Kohl’s (NYSE: KSS) is a leading omnichannel retailer with more than 1,100 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, Kohl’s offers amazing national and exclusive brands, incredible savings and an easy shopping experience in our stores, online at Kohls.com and on Kohl's mobile app. Since its founding, Kohl's has given more than $700 million to support communities nationwide, with a focus on family health and wellness.
Kohl's store front. Image obtained from globalcosmeticnews.com
Overview of Kohl's 2nd quarter 2021 earnings
- Second quarter net sales and earnings exceed expectations and company raises full year 2021 financial outlook
- Second quarter net sales increase 31.4%
- Record second quarter diluted earnings per share of $2.48 and company raises full year 2021 guidance to $5.80 to $6.10
- Strengthened financial position during the quarter, ending with $2.6 billion in cash
- Repurchased $255 million of shares in the quarter and now plans to repurchase $500 million to $700 million of shares in 2021
Kohl's management commentary on their 2nd quarter 2021 earnings
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)-- Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended July 31, 2021.
“Our performance in the second quarter marked another important step in further establishing Kohl’s as the leading destination for the active and casual lifestyle. We delivered record second quarter earnings with sales and margins materially exceeding expectations. As pleased as we are with our ongoing strategic progress, much of our opportunity is still ahead of us. We are on the eve of launching several transformational partnerships that will drive sustainable growth for years to come,” said Michelle Gass, Kohl’s chief executive officer.
“Based on our results, we are raising our full year 2021 guidance, which positions us to achieve many of our 2023 strategic goals this year, well ahead of our plan. In addition, we have accelerated our share repurchase activity, underscoring our confidence in the business and our commitment to creating shareholder value,” said Gass.
“Our performance in the second quarter marked another important step in further establishing Kohl’s as the leading destination for the active and casual lifestyle. We delivered record second quarter earnings with sales and margins materially exceeding expectations. As pleased as we are with our ongoing strategic progress, much of our opportunity is still ahead of us. We are on the eve of launching several transformational partnerships that will drive sustainable growth for years to come,” said Michelle Gass, Kohl’s chief executive officer.
“Based on our results, we are raising our full year 2021 guidance, which positions us to achieve many of our 2023 strategic goals this year, well ahead of our plan. In addition, we have accelerated our share repurchase activity, underscoring our confidence in the business and our commitment to creating shareholder value,” said Gass.
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Updated 2021 Financial Outlook
The Company is raising its full year 2021 financial outlook to include the following:
As previously announced, on August 10, 2021, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.25 per share. The dividend is payable September 22, 2021 to shareholders of record at the close of business on September 8, 2021.
The Company is raising its full year 2021 financial outlook to include the following:
- Net sales is now expected to increase in the low-twenties percentage range compared to the previous expectation of mid-to-high teens percentage range increase
- Operating margin is now expected to be in the range of 7.4% to 7.6% compared to the previous expectation of 5.7% to 6.1%
- Adjusted earnings per share is now expected to be in the range of $5.80 to $6.10, excluding any non-recurring charges, compared to the previous expectation of $3.80 to $4.20
As previously announced, on August 10, 2021, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.25 per share. The dividend is payable September 22, 2021 to shareholders of record at the close of business on September 8, 2021.
Kohl's (KSS) stock price chart for the last 5 years
The image below shows the stock price history of Kohl's (KSS) for the last 5 years. It's been a ok time for Kohl's stockholders over the last 5 years.Over the last 5 years the stock of Kohl's has increased by 34%. Not exactly shooting the lights out.
The stock of Kohl's is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Kohl's stock is positive at this point in time.
The stock of Kohl's is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Kohl's stock is positive at this point in time.
Kohl's (KSS) stock price chart for the last 5 years
Kohl's (KSS) stock vs Kroger Company (KR) vs Walmart (WMT) stock over the last 5 years
The image below shows the stock price performance of Kohl's (KSS), Kroger (KR) and Walmart (WMT) over the last 5 years. The summary below shows the returns provided by the two retailers over the last 5 years
So the stock of Walmart has easily outperformed that of Kohl's and Kroger over the last 5 years.
- Walmart (WMT): 93.9%
- Kroger (KR): 50.2%
- Kohl's (KSS): 34%
So the stock of Walmart has easily outperformed that of Kohl's and Kroger over the last 5 years.
Kohl's (KSS) stock vs Kroger Company (KR) stock over the last 5 years
Kohl's (NYSE: KSS) latest stock valuation
So what is Kohl's stock worth based on their 3rd quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Kohl's at $65.20 a stock. We therefore believe the stock of Kohl's is undervalued
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $65.20 thus a good entry point into Kohl's would be at $58.70 or below.
We expect the stock of Kohl's to kick up in coming weeks and months s to levels closer to our target price (full value price). Since the stock of Kohl's is trading atclose to our suggested entry point we rate the stock of Kohl's as a hold
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $65.20 thus a good entry point into Kohl's would be at $58.70 or below.
We expect the stock of Kohl's to kick up in coming weeks and months s to levels closer to our target price (full value price). Since the stock of Kohl's is trading atclose to our suggested entry point we rate the stock of Kohl's as a hold
Kohl's store entrance inside a mall. Image obtained from Greenwichtime.com
Next earnings release for Kohl's
It is expected that Kohl's will release their 4th quarter 2020 earnings report towards the end of February 2021