Kohl’s (NYSE:) reported better-than-expected second-quarter earnings on Thursday, despite a drop in sales, and raised its full-year earnings outlook. The retailer’s shares rose more than 3% on the news.
The department store chain reported adjusted earnings per share of $0.59 for the quarter ended Aug. 3, 2024, beating analysts’ estimates of $0.44. However, revenue fell 4.2% year over year to $3.53 billion, missing the consensus estimate of $3.69 billion. Comparable sales fell 5.1% during the period.
Despite the sales decline, Coles managed to expand its gross profit margin by 59 basis points to 39.6%. The company also reported a 9% decrease in inventory levels compared to the previous year.
“We have taken significant action to reposition Coles for future growth,” said Tom Kingsbury, Coles chief executive. “However, our efforts have not yet fully delivered the desired outcome due to the continued challenging consumer environment and weakness in our core business.”
Looking ahead, Kohl’s raised its full-year 2024 earnings forecast to $1.75 to $2.25 per share, beating analysts’ consensus of $1.53. The previous guidance range was $1.25 to $1.85. The company expects net sales to decline 4% to 6% for the year. However, its comparable sales forecast was lowered. They are now expected to decline 3% to 5%.
Kohl’s also declared a quarterly dividend of $0.50 per share, payable on September 25, 2024, to shareholders of record on September 11, 2024.