Kohl’s (NYSE: KSS) reported strong fiscal first-quarter profit and sales Thursday, surpassing expectations and increasing its full-year forecast. Nevertheless, after suggesting a hit to its full-year profit margin due to high labor and shipping costs, shares fell 12% during trading.
However, the American department store believes the current pricing atmosphere is unsustainable as the economy reopens, alleviating pressure.
“There is more full-priced selling that is available to us. So we’re taking advantage of that now. We do believe as the year progresses … some of those tailwinds will ease,” Chief Financial Officer Jill Timm said on a post-earnings call.
The retailer reported earnings of USD1.05 per share, compared to the expected USD0.04 a share. Revenue surged 70%,amounting to USD3.89 Billion, higher than analysts anticipated USD3.48 Billion.
Chief Executive Michelle Gass explained that momentum had accumulated amid the quarter, particularly in stores. Activewear experienced the biggest surge within the first quarter, reaching the mid-teens percentage from 2019, Gass said.
“The U.S. consumer is in a stronger position [and] spending has picked up, driven by stimulus, easing Covid-19 restrictions and people resuming more normalcy in their daily lives,” Gass said during an earnings call. “These factors are helping to reignite growth for the retail industry and we are positioned extremely well to capitalize on this acceleration.”
Kohl’s shares have increased over 48% year to date and has a current market cap of USD9.5 Billion.