Kohl's (NYSE:KSS) reported growth in sales, gross margin, and earnings per share when it reported Q1 earnings earlier this month. In addition, the company made progress on several of its key strategic initiatives to evolve and adapt in the changing retail world. Yet the stock crashed 13% after reporting earnings, all because the company slightly missed analyst expectations.

But for value and income investors, once again it seems the analysts' trash can be your treasure. Thanks to its sell-off, Kohl's is a modestly valued stock with a very strong dividend. For these reasons, Kohl's is looking like a good buying opportunity for Foolish investors to get one up on Wall Street.

A "bad" quarter of growth
First, a quick recap of the details. Kohl's reported $4.1 billion of total sales, up 1% year over year. Comparable-store sales rose 1.4%. Diluted earnings per share rose 5% in the period, due to sales growth as well as a 17 basis-point improvement in gross margin.

In addition, Kohl's financial position has improved over the past year. The company now has $1.1 billion in cash on the balance sheet, up 67% year over year. Meanwhile, Kohl's has a modest debt level. Its long-term debt to equity ratio is a manageable 46%.

Still, shares sank after the earnings announcement, mostly because sales missed analyst estimates by about $70 million. But what the market is missing is that in light of the multiple first-quarter headwinds weighing on the retail industry more broadly, Kohl's performance didn't warrant such a huge sell-off. And, because of its many initiatives set for the rest of the year, Kohl's growth will likely accelerate from here.

Better days are ahead
In the first quarter, retailers had to grapple with brutal winter weather that kept shoppers at home. This is why numerous retail earnings reports from the first quarter were disappointing. This isn't a Kohl's-specific issue, and it's likely that future quarters will benefit from pent-up demand. Indeed, Kohl's management noted on the earnings conference call that comparable sales declined in February, then grew approximately 2% in March and April.

Plus, Kohl's is launching several promising initiatives to help produce higher growth over the remainder of the year. The first is a refresh across several brands. This year, Kohl's will expand its Nike offerings, as well as bringing in new brands including Bliss and Gaiam Yoga apparel, to capitalize on the health and wellness trends. In the outdoor category, Kohl's is planning a major refresh of the Columbia brand this fall.

Even more exciting is Kohl's rapidly growing mobile presence. Kohl's has now reached 7 million downloads for its mobile app. With it, shoppers will receive customized promotions that can be scanned and redeemed in-store. Last quarter, Kohl's launched voice-based search on Android and image-based search on Android and iOS.

The Foolish bottom line
Kohl's first quarter looks like a disaster if investors focus on its stock price performance alone. Long-term investors should be more concerned with the underlying business. Kohl's battled some tough headwinds in the first quarter that weighed it down, but those headwinds are largely in the past. And, even in spite of those challenges, Kohl's still grew revenue, comparable sales, margins, and EPS.

Kohl's stock trades for 15 times earnings and pays a solid 2.7% dividend yield. Since Kohl's initiated its dividend in 2011, it has increased it by 15% per year.

Kohl's clearly didn't get much credit for navigating the tough first quarter. And investors don't seem too pleased with its programs to drive future growth. But at such an attractive valuation and a high dividend yield, this could be a great buying opportunity, as sentiment may not remain so negative if Kohl's starts reporting higher growth in the quarters ahead.