Kohl’s Corporation (NYSE:KSS) announced its earnings and revenue for the third quarter that beat consensus forecast, driven by healthy back-to-school sales. Shares of KSS surged more than 7 percent in the mid-day trading session following the news.
The company said that its same-store sales moved up 1 percent in the latest quarter, matching the consensus forecast.
A surprise fall in the comparable quarterly revenue at competitor Macy’s (M) had raised concerned in the department store industry, effecting shares of Kohl’s, J.C. Penney Co and Nordstrom Inc.
U.S. back-to-school revenue jumped 4.7 percent in August, as compared to last year, according to a research carried out by ShopperTrak. The back-to-school season is the second largest shopping period in the United States after the holiday season.
Though, Kohl’s said revenue was weak for the month of September.
Experts have notified that the warmest August-October period in more than two decades affected sales of the company’s winter apparel and footwear. Kohl’s is more weather-sensitive than competitors, and tends to have declining revenue when the weather goes against forecast.
Macy’s also blamed warm weather, combined with tepid customer demand and a strong dollar that discouraged foreigners from shopping, for its weaker-than-anticipated revenue and earnings for the latest quarter.
This month is also shaping up to be warmer versus the average, and could compel department stores to offer more discounts to unload fall season inventory in order to stock holiday season items in time for critical shopping season, according to experts.
Kohl’s reported earnings of $120 million, or 63 cents a share for the three months period ended Oct. 31., down 15.5 percent from the same period last year. On adjusted basis, the company reported earnings of 75 cents a share.
Revenue for the quarter came in at $4.43 billion, up 1.2 percent from last year. Analysts were looking for earnings of 69 cents a share on $4.40 billion in revenue.
