Fragrance brands

Kohl’s Sees Strong Profits in 2022 and Turns to Failsafe Brands

  • U.S. department store optimistic about 2022 results
  • Customers return after pandemic lull
  • Shares rise 4% pre-market

March 1 (Reuters) – U.S. department store chain Kohl’s Corp (KSS.N) on Tuesday predicted better-than-expected sales and profits for 2022 thanks to faster shipments and the introduction of customer-favorite brands, Calvin Klein to Tommy Hilfiger.

The results, along with positive earnings from rival Macy’s Inc (MN), signal optimism for the sector after a difficult 2021 when supply chain bottlenecks and the COVID-19 crisis undermined sales.

Kohl’s shares rose 4% in premarket trading as it also unveiled a $3 billion share buyback and doubled its dividend after beating holiday quarter profit expectations.

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The clothing, jewelry and fragrance retailer, which has more than 1,100 stores in the United States, offered weaker promotions and limited some of its weaker private labels to protect its profits from soaring shipping costs. transport.

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It launched Sephora stores at its outlets and introduced ever-popular brands – including Cole Haan and Eddie Bauer – to attract more customers.

The moves increased its gross margin to 33.2% in the quarter from 32% a year earlier.

He expects net sales to rise 2% to 3% in fiscal 2022, while analysts on average had expected a 2.2% rise, according to IBES data from Refinitiv.

The company expects earnings per share to be between $7.00 and $7.50 excluding items, versus analyst expectations of $6.55 per share.

But it missed expectations for holiday quarter sales due to product shortages, a resurgence in coronavirus cases and early discounts that encouraged customers to bring forward their Christmas shopping.

Kohl’s, based in Menomonee Falls, Wis., is also coming under increasing pressure from activist investors to drop its e-commerce business or consider going up for sale.

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Reporting by Deborah Sophia in Bengaluru; Editing by Aditya Soni and Andrew Cawthorne

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