Corp. Kohl (KSS) reported fourth-quarter 2010 earnings of $ 1.66 per diluted share, which was in line with the Zacks consensus estimate. However, earnings were 7.3% year-over-year to $ 1.40.
For the full year, earnings came in at $ 3.65 a share that has grown by 13% compared to $ 3.23 in fiscal 2009. However, annual earnings were below the Zacks consensus estimate of $ 3.73.
The profits of the year on year were primarily from improved merchandise margins, strong inventory management and successful brand strategies.
Driven by strong profit in fiscal 2010, the company has issued guidance for earnings for the first quarter and full fiscal year 2011. For the first quarter, the company expects earnings to be in the range of cents 68 to 73 cents, whereas for the full year earnings are projected in rage of $ 4.05 to $ 4.25 a share.
Quarterly details
Net sales for the quarter rose by 6.3% to 6.0 billion from $ 5.7 billion in the year-ago quarter, on the back of growth in market share. Revenues were in line with the Zacks consensus estimate.
Annual revenues boosted 7.1% to 18.4 billion that was in front of the Zacks consensus estimate of 18.3 billion.
Kohl reported an increase of 4.3% in comparable-store sales for the fourth quarter, while the comparable-store sales campaign grew 4.4%. The company anticipates total sales for advancing in the range of 4% – 6. 0% is in the first quarter and fiscal 2011. The company projects the same store sales peak – 4% 2% in the first quarter and full year 2011 as well.
Gross margin expanded 36.8%, fueled by growth in sales, inventory management and merchandising effective 40 basis points (bps).
Total selling, General and administrative expenses grew 4.1% 1,242 million, compared to the previous year.
Kohl recorded a growth of 13.6% in operating income to 820 million dollars from 722 million in the quarter of last year, while the operating margin increased 90 bps 13.6%.
Cash, balance sheet and share repurchase
Kohl came out the year with cash and cash equivalents of 2,271 million, compared to $ 3,019 million in the previous year. The company generated 1676 million net cash from operating activities and used 761 million to capital expenditures. Long-term debt and capital leases at the end of the quarter was $ 991 million.
The Board of Directors has increased the share repurchase authorization by $ 2.6 billion, equal to $ 3.5 billion. In addition, 23 February, the Board of Directors has declared a quarterly dividend of 25 cents per share. This is the first dividend paid to shareholders in the history of Kohl. The dividend will be paid on 30 March to all shareholders of record on March 9, 2011.
Kohl's competes primarily with Macy's Inc. (M), jc Penney (JCP) and dillards Inc. (DDS) and currently holds a Zacks rank # 3, which translates to Hold short-term rating.
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