Kohl’s Corp. (KSS) reported fiscal 2010 first-quarter results with a net income of $199 million or 64 cents per share, compared to $137 million or 45 cents per share in the year-earlier quarter. Quarterly earnings also topped the Zacks Consensus Estimate of 0.62 cents per share.
Quarterly net sales grew by 10.9% to $4.0 billion from $3.6 billion in the prior-year quarter, primarily due to a 7.4% growth in same-store sales. Gross margin increased 49 basis points (bps) to 38.1%, mainly due to prudent inventory management and effective merchandising.
Total operating expenses increased by 39.8% to $3.5 billion from $2.5 billion in the year-ago period. The increase was primarily caused by a 7.3% rise in selling, general and administrative expenses to $1.0 billion. However, growth in the top-line and gross margin more than offset the increase in operating expenses.
During the quarter, Kohl’s had opened 9 new stores. At quarter end, the company had 1,067 stores across 49 states in the U.S. During the year, the company expects to open an additional 21 stores. In addition, the company completed remodeling in 17 stores during the period, and expects to remodel another 68 stores during the year.
Kohl’s ended the quarter with cash and cash equivalents of $2.3 billion, compared to $856 million in the prior-year quarter. During the fiscal year, the company generated $287 billion of cash from operating activities.
Based on the first quarter results, the company raised its guidance for fiscal 2010. Annual earnings are now expected to be at $3.75 per diluted share compared to the earlier guidance in the range of $3.40 to $3.63 per share.
The company also provided guidance for the second quarter of fiscal 2010. Management expects earnings to be in the range of 70 cents to 75 cents per diluted share.
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