Khol's (KSS) Stock: Gaining on Strong Earnings

Kohl’s Corporation (NYSE: KSS)

Kohl’s Corporation is having an incredibly strong day in the market today, and for good reason. The company recently released its results for the second quarter, blowing away expectations. However, guidance was reduced. Today, we’ll talk about what we saw from earnings, how the stock reacted to the news, and what we can expect to see from KSS moving forward.

KSS Reports Strong Q2 Results

As mentioned above, Kohl’s is having an incredibly strong trading session today after reporting Q2 results. Here’s what we saw from the report…

  • Earnings Per Share – In terms of earnings per share, KSS definitely excited investors. During the quarter, analysts expected that the company would generate earnings per share in the amount of $1.03. However, the company beat expectations by $0.19 per share; reporting earnings at $1.22 per share.
  • Revenue – When it comes to revenue, KSS also came in ahead of expectations. During the second quarter, analysts expected that the company would produce revenue in the amount of $4.16 billion. However, the company actually reported revenue in the amount of $4.18 billion.
  • Guidance – While Khol’s did incredibly well when it comes to earnings and revenue, there was one slightly negative aspect on the report. The company has decided to adjust its earnings per share expectations for the full year of 2016. For the year 2016, the company now expects earnings to come in between $3.83 and $4.00 per share. The good news is that even on the low end, this is still great guidance when compared to consensus estimates of $3.83 per share.

Following the release of the data above, KSS Chairman, CEO and President, Kevin Mansell had this to say…

Our sales improved over our first quarter results, but were below our expectations. We are encouraged by the performance of juniors and young men’s as we enter the Back-to-School season. Our inventory management initiatives helped us to achieve a strong increase in gross margin with ending inventory per store down significantly from last year. Our associates throughout the organization continue to effectively manage expenses in response to changing sales trends and I appreciate all of their efforts.”

How The Stock Reacted To The News

While the fact that guidance was revised downward isn’t good news, it’s easy to overlook that following the strong earnings and consensus estimate. As a result, we saw a positive reaction to the release in the market. By the end of the trading session, the stock climbed by $6.15 per share or 16.17% to close the day off at $44.19 per share.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from KSS. While we may see a slight correction from today’s highs, overall, things are going great. The company is doing overwhelmingly well and anticipating growth throughout the year. What more can we ask for?

What Do You Think?

Where do you think KSS is headed moving forward? Join the discussion in the comments below!