Kohl’s reported a profit for the third quarter.
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Kohl’s stock is climbing on Tuesday morning, after the department store reported a surprise third-quarter profit and announced plans to resume its dividend payout.
Kohl’s (ticker: KSS) said Tuesday it earned a penny a share on an adjusted basis, on revenue that fell 14% year over year to $3.98 billion. Analysts were looking for the company to lose 43 cents on revenue of $3.88 billion. Same-store sales fell 13.3%, more than the 11.7% consensus estimate.
The company also said it plans to reinstate its dividend during the first half of 2021. At the moment, none of the major department store stocks sport a dividend yield.
Kohl’s is up 1.4% to $26.52 in recent trading, and it is easy to see why investors are excited about the quarter.
Aside from unexpectedly turning a profit, Kohl’s delivered improved inventory and substantially slowed its gross margin declines from the second quarter. In fact, nearly all measures improved from second-quarter levels, and the department store sector as a whole is rallying on upbeat vaccine news.
Of course, more than 15% of Kohl’s stock is shorted—meaning investors are betting it will fall—so that could also be contributing to today’s moves, and Kohl’s has already pared some of its earlier gains.
The shares are down 48% in 2020, as the Covid-19 pandemic exacerbated existing retail trends—declining foot traffic and the shift to e-commerce—that have been hurting department stores for years.
Write to Teresa Rivas at [email protected]
