Kohl’s Beats Earning Expectations For 3Q (NYSE: KSS)

Investors were happy to hear that Kohl’s handily beat sales and earnings forecasts for the third quarter. Kohl’s is saying that the numbers indicate its revamping strategy is seeing success. The company has reaffirmed its full-year guidance of earnings of $4.40 to $4.60 a share. Shares of Kohl’s increased 7 percent on Thursday after the earnings report was released.

Kohl’s reported that same-store sales increased by 1 percent in the third quarter. The company reported a 1.8 percent decline in same-store sales in the same quarter a year ago. The retailer reported its first $100 million sales day on Wednesday.

Kohl’s revamped loyalty program now has about 34 million members. That is nearly double the number of members it had at this point last year. Kohl’s believe that the points earned by these members will give them an increased incentive to shop at Kohl’s during the holiday shopping season. Management said on the company’s earnings call that redemption rates tend to increase to about 40 percent in the final three months of the year.

The company is planning to launch a campaign in the fourth quarter to encourage its loyalty members to sign up for its credit program by prescreening them. Kohl’s is also planning to increase its holiday marketing by about 14 percent. Kohl’s said that it expects the fourth quarter to be “very competitive.”

Competitor department store Macy’s reported on Wednesday that same-store sales dropped 3.6 percent during the third quarter. Macy’s lowered its its full-year guidance to $4.20 to $4.30, from $4.70 to $4.80 on the news. On Wednesday, department store J.C. Penney preannounced that its same-store sales increased 6.4 percent in the third quarter. Its full results for the third quarter will be announced on Friday.

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