Kohl's (NYSE:KSS) reported better-than-expected second-quarter earnings on Thursday, despite a decline in sales, and raised its full-year earnings guidance. The retailer's shares rose more than 3% following the news.
The department store chain posted adjusted earnings per share of $0.59 for the quarter ended August 3, 2024, surpassing analysts' estimates of $0.44. However, revenue fell 4.2% YoY to $3.53 billion, missing the consensus forecast of $3.69 billion. Comparable sales decreased 5.1% during the period.
Despite the sales decline, Kohl's managed to expand its gross margin by 59 basis points to 39.6%. The company also reported a 9% reduction in inventory levels compared to the previous year.
"We have taken significant action to reposition Kohl's for future growth. However, our efforts have yet to fully yield the intended outcome due in part to a continued challenging consumer environment and softness in our core business," said Tom Kingsbury, Kohl's CEO.
Looking ahead, Kohl's raised its full-year 2024 earnings guidance to $1.75 to $2.25 per share, above the analysts' consensus of $1.53. The previous guidance range was $1.25 to $1.85. The company expects net sales to decrease 4% to 6% for the year. However, its comparable sales guidance was cut. It is now projected to fall 3% to 5%.
Kohl's also announced a quarterly dividend of $0.50 per share, payable on September 25, 2024, to shareholders of record as of September 11, 2024.