While department stores continue to fight through financial struggles as fewer people walk into their stores, Kohl’s is tightening up its merchandising processes to stay in the black.
During Q3, the retailer boosted net income by 21.7% to $146 million, even though quarterly sales dipped 2.3% and comparable sales declined 1.7%, a third straight drop in revenue.
Kohl’s adjusted earnings per share came in at $0.80, beating Wall Street expectations of $0.70, with the brand reaffirming its full year earnings guidance range of $3.80 to $4.00 per share.
Kevin Mansell, Chairman, CEO and President at Kohl’s, credited the company’s inventory management capabilities for bringing in profits despite the revenue loss. Although the department store continues to see slowed sales, its caution in buying merchandise enabled the brand to ensure products are sold by the end of the season without being heavily discounted.
With excess inventory a problem that has long plagued department stores (and benefitted many of their off-price counterparts), the careful monitoring of merchandise may have to be a priority for other traditional brands going forward
Prior to the earnings release, Kohl’s announced that its CFO, Wesley S. McDonald, intends to retire in late Spring 2017 after 14 years with the company. Kohl’s will be conducting a search to fill the CFO position over the next few months to prepare for McDonald’s retirement.