Kohl’s same-store sales rise, but profits fall

Kohl’s Corp. saw improved sales at established stores in the third quarter, but net income fell.

The Menomonee Falls-based company earned $117 million in the three months ended Oct. 28, down 20% from $146 million a year ago. Earnings per share were 70 cents, down from 83 cents in the third quarter of 2016.

Sales at stores open at least a year — a key measure of retail performance — were up 0.1%. The modest gain ended six straight quarters of negative comparable sales. Kohl’s has seen improvement in comparable sales for the last two quarters.

“While a comparable sales rise of 0.1% may be meager, the fact that it brings to an end an extended period of decline is significant,” Neil Saunders, managing director of GlobalData Retail, said by email.

Saunders said the gains come as Kohl’s has increased customer traffic by improving its product mix through steps such as a focus on health and wellness.

“We have begun to see new customer acquisitions grow, and that has not been the case for us for quite a long time,” Kohl’s CEO Kevin Mansell told analysts on a conference call Thursday. “And so that’s another indicator that the offering, both product and marketing, that we’re delivering is more appealing to people who haven’t traditionally shopped at Kohl’s.”

Three hurricanes, most notably Hurricane Harvey, forced Kohl’s to close some 100 stores temporarily and hurt the company’s performance during the quarter, chief financial officer Bruce Besanko said.

The storms reduced sales by $15 million and raised expenses by more than $8 million, some of that coming as Kohl’s paid employees while stores were closed, Besanko said. He estimated that the hurricanes reduced earnings per share by about five cents.

Overall sales for the period totaled $4.33 billion, up 0.1% from a year ago.