Kohl’s soars after upping outlook for second straight quarter

Kohl’s Corp. raised its full-year outlook for the second straight quarter, a sign that chief executive officer Michael Bender is helping to stabilise performance at the struggling retailer. 

The retailer now sees net sales declining in a range of 3.5% to 4% for the full year- a smaller drop than the projection offered in late August. The company also lifted its comparable sales and adjusted diluted earnings per share guidance for the year.

The shares rose 24% at 7:26 a.m. in early trading in New York. The stock has advanced 12% so far this year through Monday’s close. This week, Bender was named as the company’s permanent CEO. Previously, he had been serving on an interim basis. 

The outlook suggests that Kohl’s is moving past its recent turbulence, which culminated in the abrupt departure of its previous chief executive officer after only a short period at the company. The company still faces a tough path- it has now posted 15 straight quarters of declining year-over-year revenue. But the latest results show improvement, with the company citing a value proposition that is resonating with consumers.

In the third quarter, comparable sales fell 1.7%, better than the average of analyst estimates. 

Bender has largely executed a strategy initially set by his predecessor, Ashley Buchanan, which included a focus on reviving the jewellery business as well as selling more petite sizes. The store’s in-house labels grew 1% in the quarter. 

Retailers have warned that some consumers are pulling back and spending more cautiously, while certain higher-income shoppers have traded down to cheaper goods. That trend may benefit Kohl’s which offers prices that in general are lower than many department stores.