Kohl's bucks department store doldrums

The company finds strength in its business strategies after reporting a positive second quarter.

An aggressive seasonal labor strategy and investments in smaller store formats are accelerating growth at Kohl’s, which reported increases in sales and earnings in its second quarter.

Total sales during the 13 week second quarter ended Aug. 4 increased 4 percent to $4.57 million compared to $4.395 million during the 14 week second quarter the prior year. Same store sales in the U.S. were positive 3.1 percent. Kohl’s earned $292 million in the quarter, an increase of 40 percent over the $208 million the company earned in the second quarter of 2017.  Earnings per share during the period, aided by tax reform, increased 42 percent to $1.76 from $1.24.

“We are pleased to report that our sales momentum continued in the second quarter, resulting in a comparable sales increase of 3.1%, our fourth consecutive quarter of positive comparable sales. We saw strength across the business -- both our store and digital channels, all regions of the country, and our proprietary and national brands,” said Michelle Gass, Kohl's Chief Executive Officer. “Our Men's and Women's apparel businesses led the company, followed closely by Footwear. We also reported higher gross margin as a result of our ongoing focus on inventory management. I would like to thank our team for their outstanding efforts in delivering strong and sustainable performance, which are reflected in our results.”

Department store chains, such as Kohl’s, have been looking for ways to grow their e-commerce sales, as Amazon continues to take market share in categories such as apparel and appliances.  

In June, Kohl’s announced that it was looking for people to join its team to help deliver an easy, seamless omnichannel experience for customers during the back-to-school, fall and holiday seasons.

The company has also been recently investing in updating its investments within real estate, opening smaller company stores and downsizing its current locations by offering to divide them for other potential tenants, such as fitness gyms.

Kohls also announced a partnership with Authentic Brands Group (ABG), owner of Nine West, to include the brand into its brand portfolio. In addition to Nine West footwear, handbags and outerwear, Kohl’s will debut a new women’s apparel collection. The introduction of Nine West, in partnership with brand owner, ABG, elevates Kohl’s offerings for women and millennial customers and brings Kohl’s position as a destination for the most sought-after brands at an incredible value.

At the end of its second quarter, the company operated more than 1,100 stores in 49 states.