Sales fell and Kohl's (KSS +1.65%) reported a second-quarter loss, but the results were significantly better than what Wall Street was expecting when the retailer reported its financial results on Aug. 18.
The department store chain said it was able to reopen all 1,100 of its stores during the period, helping to soften the decline in revenue, which fell 23% to $3.2 billion, but that was well ahead of analyst forecasts of less than $3.1 billion.
Although it reported a profit under generally accepted accounting principles (GAAP) of $47 million, or $0.30 per share, adjusted for impairments, real estate sales, and other one-time expenses, Kohl's recorded a loss of $39 million, or $0.25 per share, dramatically above the $0.83 per share loss anticipated.
Image source: Kohl's.
Planning for more to come
CEO Michelle Gass said by controlling costs, managing inventory, and advancing its digital playbook during the shutdown, Kohl's "made significant progress in rebuilding our business."
The retailer generated positive cash flow in the quarter and ended with $2.4 billion in cash and equivalents, which should help it weather any future shutdowns states may mandate.
Gass said Kohl's was "planning for the crisis to continue to impact our business in the near-term." She continued, "We are well-positioned to capitalize on evolving customer behaviors and the retail industry disruption, which we believe will drive long-term growth and increased market share."
Still retail sales are moderating as the country recovers from the cataclysm of the pandemic. After sales plunged almost 15% in April, they rocketed nearly 18% higher in May, followed by an 8% gain in June, and a 1% rise in July. The National Retail Federation is still looking for full-year sales to be 10% below last year.
Kohl's has appropriately adopted a conservative outlook for the rest of the year even though it is not providing specific guidance.
