Menomonee Falls-based Kohl’s Corp. says comparable sales for the fourth quarter of 2020 were down 11%, but the company expects earnings to show a “significant improvement” from last quarter.
The retailer on Thursday released a business update for the fourth quarter, ahead of its full quarterly earnings report scheduled for March 2. Kohl’s projects Q4 earnings to exceed expectations.
While sales were down and total revenue also dropped 10%, the numbers are gradually improving as the retailer continues to weather the COVID-19 pandemic. Quarter three of 2020 saw a 13.3% decrease in comparable sales and total revenue was down 14%.
“We are very pleased with the continued progress we are making against the strategic framework we outlined in October 2020,” said Michelle Gass, Kohl’s chief executive officer.
She said digital sales were up more than 20%, and accounted for more than 40% of net sales. Digital sales for Q3 were up more than 25% over last year.
Kohl’s expects fourth quarter diluted earnings per share to be in the range of $1.00 to $1.05, before considering any impact from tax planning strategies. Preliminary results indicate the quarter’s expected gross margin rate will be better than expected, thanks to “disciplined inventory management and further optimization in promotional strategies,” according to the release.
Gass noted Kohl’s strategic partnership with Sephora, launching this fall. It will add mini beauty shops inside at least 850 Kohl’s stores by 2023, which she said, will “drive significant growth” for the company.
“We look forward to sharing more on this and our other initiatives, as well as providing more detail on our path to 7% to 8% operating margin, on our upcoming earnings call in March,” she said.
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