What happened
Kohl's Corporation (KSS -7.77%) stock was climbing today after the company released a strong fourth-quarter earnings report but sold off mysteriously nonetheless. Though there was no specific news today, the stock bounced back in an indication that investors thought shares were oversold. Shares closed up 6%.
Image source: Kohl's.
So what
In the year-end report, Kohl's said comparable sales rose 6.3% and the company beat estimates on both the top and bottom lines. Total revenue increased 9.2% to $6.78 billion, benefiting from an extra week in the calendar, which topped estimates at $6.74 billion. Gross margin improved 43 basis points to 33.8% as the company successfully controlled inventory. Adjusted earnings per share increased from $1.44 to $1.87, ahead of expectations at $1.77.
Kohl's also said it will launch a pilot program with Aldi launch to open 10 of its grocery stores inside existing Kohl's, as the department store chain is looking to add traffic drivers to excess space inside its stores. Kohl's has also partnered with Amazon in a pilot program to allow both Amazon package returns and Amazon shop-in stores, featuring gadgets like Alexa-powered Echos and Kindles.
Now what
Kohl's peers continued to come out with earnings as J.C. Penney stock fell today and Nordstrom rose, but considering Kohl's already released its fourth-quarter figures, it seems unlikely that that affected its stock. The department-store chain also offered a strong outlook for 2018, projecting earnings per share of $4.95 to $5.45, up from $4.19, with a benefit of the new tax law. Even with today's gains, the stock is still cheap based on that forecast. Investors seem to be coming back to their senses after yesterday's sell-off.
