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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Today brings good and bad news – but mostly bad news – for Kohl (NYSE: KSS) buyers. The stock is down 5.3% in noon trading (EDT) after investors look at the second quarter results released this morning and have declared them "mixed. "" data-reactid = "17"> Today brings good and bad news – but mostly bad news – for Kohl (NYSE: KSS) buyers. The stock is down 5.3% in noon trading (EDT) after investors look at the second-quarter results released this morning and have declared them "mixed."
On the upside, Kohl's estimates for the quarter are better than expected, reporting earnings of $ 1.51 per diluted share and pro forma earnings of $ 1.55. (Analysts were only looking for $ 1.53). Sales also exceeded expectations, reaching $ 4.4 billion while analysts were seeking only $ 4.2 billion.
The red arrow crushes on the ground
<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "So what"data-reactid =" 30 ">So what
But that's the end of the good news.
Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Although sales and profits have exceeded expectations, they were also both down from Q2 2018 results. Sales were down 3% from the prior year, as were comparable store sales, while earnings were in accordance with generally accepted accounting principles (GAAP) fell by 14% a lot more. (Pro forma, Data-reactid = "32"> Although sales and profits exceeded expectations, they were also both better than expected. down from Q2 2018 results. Sales were down 3% year-over-year, as were store sales, while GAAP profits declined by 14%, which is much more marked. (Pro formaKohl's claims that his revenues have only decreased by 12%).
Gross margins decreased 72 basis points from the previous year, but net profit margins fell closer to one full percentage point – 5.4%.
<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Now what"data-reactid =" 34 ">Now what
That said, Kohl remains confident that the rest of the year will improve. Better sales in comparable stores than in the first quarter are a trend that "continued in August thanks to a successful start to the new school year," said Executive Director Michelle Gass. The problem is that this is not the only trend that will continue.
Management has kept to its expectations for adjusted earnings of $ 5.15 to $ 5.45 this year. On the one hand, it would be significantly better than the $ 5.23 per share sought by Wall Street. On the other hand, it would be another decline from the $ 5.60 per share reported by Kohl for the 2018 fiscal year.
As we saw in the second quarter, Kohl's should post earnings higher than those of the year, even as its profits decline. You can hardly blame investors for being unhappy with that.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Rich Smith has no position in any of the actions mentioned. The Motley Fool has no position in the mentioned actions. The Motley Fool has a disclosure policy."data-reactid =" 38 ">Rich Smith has no position in any of the actions mentioned. The Motley Fool has no position in the mentioned actions. The Motley Fool has a disclosure policy.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This article was originally published on & nbsp;Fool.com"data-reactid =" 39 "> This article was originally published on Fool.com
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