Department stores chain, Kohl’s Corporation (NYSE: KSS) reported on Thursday that its fiscal fourth-quarter earnings slumped 17% as markdowns to clear stockpile of inventories during the holiday season quarter hurt the bottom line.
The Company also provided a downbeat outlook on the full-year.
The Menomonee Falls, Wisconsin-based Company, which caters to price conscious middle-class shoppers, expects same-store-sales to grow by 2% in this fiscal after posting a modest gain of 0.3% in last fiscal.
For the quarter ended February 2, Kohl’s Corp. reported a profit of $378 million or $1.66 a share compared to a profit of $455 million or $1.82 a share, in the year-earlier quarter. Analysts polled by Thomson Reuters were expecting earnings of $1.63 a share.
The Company recently reported that total sales for the quarter climbed 5.45% to $6.34 billion since the recently concluded quarter included one extra week of sales.
Gross margin contracted by 2.9 points to 36.2%, in the recently concluded quarter, which was attributable to markdowns in December as shoppers were reluctant to shop in the backdrop of “fiscal cliff” worries and were lured by last-minute deals. Later in January, the company once again cleared stock at discounted prices, in order to make shelves clear for the spring collection.
“Sales for the fourth quarter developed very late and as a result, came at a cost to profitability,” said Kohl’s Chief Executive Kevin Mansell said in a statement, adding that cost control measures helped further damage on the bottom line.
For the current fiscal, the company expects earnings to be in the range of $4.15 to $4.45, falling short of analysts’ consensus estimate of $4.56, according to a data compiled by Thomson Reuters.
Same-store-sales rose 1.9% during the holiday season quarter compared to 3.9% increase at Macy’s and 3% gain at Dillard’s Inc.