Menomonee Falls-based Kohl’s Corp. today reported third quarter net income of $117 million, or 70 cents per diluted share, down 20 percent from $146 million, or 83 cents per share, in the third quarter of 2016.
Operating income totaled $257 million, down from $301 million in the year-ago quarter.
Revenue totaled $4.3 billion, flat from the same quarter a year ago. Comparable store sales were up 0.1 percent, compared with a 1.7 percent decrease in the third quarter of 2016.
The company said the improved sales performance was driven by an increase in store traffic. Its EPS missed analyst expectations, but revenue beat analyst expectations by $30 million.
“We are pleased to report an increase in comp sales for the quarter as the traffic momentum we saw in the first half of the year continued,” said Kevin Mansell, chairman, president and chief executive officer of Kohl’s Corp. “We saw strong results during the back-to-school season, achieving a low single-digit positive comp. The middle of the quarter was soft as we experienced disruptions from the hurricanes and other unseasonal weather. The quarter closed with strong sales in the second half of October.”
Kohl’s continues to gain market share in active wear, and saw growth in a number of national brands like Levi’s, Columbia and Fitbit during the quarter, Mansell said.
Kohl’s had 1,156 stores at the end of the quarter, opening four new small-format stores during the period. Inventory per store decreased for the seventh consecutive quarter as the company seeks to improve its working capital and cash flow. Mansell hinted Kohl’s will reduce the size of some of its low-volume, full-size stores in the fourth quarter.
The company in mid-October began testing its Amazon partnership in the Los Angeles and Chicago markets. Mansell said the tests of Amazon Smart Home Experiences at 10 stores and Amazon returns at Kohl’s in 82 stores went successfully, but declined to get into specifics.
“We believe both of these tests have the potential to drive incremental traffic to our stores, which as you know, is our No. 1 priority,” Mansell said.
And Kohl’s announced it has expanded its board of directors to 11 members and elected H. Charles Floyd, global president of operations at Hyatt Hotels Corp., to the vacant seat. Floyd has worked in a number of leadership roles at Hyatt since he joined the firm in 1981.
“Chuck is a great addition to our board,” Mansell said. “His global operational leadership, innovative thinking and experiences in the dynamic hospitality industry will be valuable assets to Kohl’s.”