In this video segment, Motley Fool superstars Chris Hill and Bill Barker discuss Kohl's (NYSE: KSS) ups and downs over the last fiscal year, put this past quarter’s growth into perspective, and compare Kohl’s holiday guidance to a major competitor in the retail sector. Is there hope for Kohl's as it closes out 2015? Tune in to find out!
A full transcript follows the video.
This podcast was recorded on Nov. 12, 2015.
Chris Hill: This looks like a good quarter, but I think the reason it looks like a good quarter is because expectations were just not that high.
Bill Barker: Well, if expectations weren't that high, it's probably because this stock has done nothing for investors over the last ten years. And I think --
Hill: So, for good reason.
Barker: Ten years of going nowhere tends to lower expectations, and rightfully so, because although this was at one time even a bit of a momentum stock, it definitely had its day. It really hasn't had it’s day for about seven, eight years now. It's pretty flat in terms of sales over the last few years. It's barely above what it was seven years ago. And in terms of earnings per share, the same.
So, it's had a really tough year as a stock. It actually was doing pretty well going into the summer, and a couple bad quarters, and much lower expectations. And as you say, to beat lower expectations and to bounce mildly up off of your 52-week low is no great trick.
Hill: It is no great trick. Although, I think at least a little bit of the enthusiasm -- if that's the word -- for the stock today has to do with the guidance. Their guidance for the holiday ... they basically just maintained their guidance for the full fiscal year, which, compared to Macy's (NYSE:M)... Macy's has higher expectations, but Macy's is a bit more sanguine about the holidays than Kohl's appears to be.
Barker: Yeah. You're right. Slightly happier words than Macy's gave, and I think Macy's discussion yesterday was a surprise for many in terms of its inventories and things like that, I would seriously doubt that at the moment, Kohl's is outperforming Macy's in any meaningful way.
It goes back to expectations. This is a stock that was down 27% for the year, down 29% over the last three months. It did peak in the summer, and really took quite a spike, but it's just not had any numbers that you would be enthusiastic about for quite a while.
Bill Barker has no position in any stocks mentioned. Chris Hill has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.