Shares of Kohl's (NYSE:KSS) were moving higher today after the department-store chain turned in a solid fourth-quarter earnings report and guided toward a strong 2019. As a result, the stock was trading up 7% as of 12:28 p.m. EST.
Kohl's said comparable-store sales ticked up 1% in the quarter, following a 6.3% jump the year before to give it a two-year comp of 7.3%. Net sales were down 3.3% to $6.54 billion, because there was one less week in the period compared to a year ago, slightly less than estimates for $6.58 billion.
Gross margin was flat in the quarter, while adjusted earnings per share rose 20% to $2.24 with the help of a lower tax rate. That figure beat analyst expectations for EPS of $2.18.
CEO Michelle Gass summed up the performance, saying:
The positive momentum we've had all year continued as we achieved a 1 percent comp sales increase for the fourth quarter, resulting in a 1.7 percent increase for the year. ... With a clear focus on driving traffic and operating with discipline, the Company is delivering sales growth while also improving profitability. We are financially strong and our overall health in the business is positioning us well for continued success.
Kohl's also said it would raise its dividend by 10% to $0.67 a share, giving the stock a 3.8% dividend yield.
Investors were also impressed with Kohl's guidance for the year as the company sees comparable sales rising between 0% and 2%, and earnings per share of between $5.80 and $6.15, up from $5.60 in 2018 and better than analyst estimates of $5.77.
Additionally, Kohl's announced a development partnership with Planet Fitness, which will open gyms next to Kohl's stores, as Kohl's continues its strategy of partnering with companies like Amazon and Aldi as part of its "rightsizing" initiatives. That strategy, among others, seems to be paying off, as Kohl's rising profit guidance indicates.