Kohl's ups its omnichannel game

Press enter to search
Close search
Open Menu

Kohl's ups its omnichannel game

By Gina Acosta - 03/14/2018
Kohl's announced it is making a multi-year commitement to migrate Kohl’s systems and applications to the cloud, modernizing the company’s technology footprint.

Kohl's is making a big investment toward providing shoppers with a best-in-class omnichannel customer experience.

Kohl's announced it is making a multi-year commitement to migrate Kohl’s systems and applications to the cloud, modernizing the company’s technology footprint. The technology investment supports the company’s efforts to replace legacy systems, enhance operational efficiencies and reduce long-term costs.

“Kohl’s is uniquely positioned at the forefront of retail’s cloud computing capabilities to transform our operations and equip our team to meet short- and long-term technology needs,” said Ratnakar Lavu, Kohl’s executive vice president and chief technology officer. “Cloud has become the foundation for this transformation and brings our teams greater flexibility to scale resources, react quickly and more cost effectively, and in turn, deliver a great experience to our customers.”

Kohl’s cloud migration includes aspects of e-commerce, mobile and business operations. Early success to date includes the migration of Kohls.com to operating within the cloud, allowing for a faster digital experience for Kohl’s customers. As Kohl’s migrates systems and applications to the cloud, the company will focus on IT operations, further driving efficiencies and business value.

Earlier this month Kohl's announced it is bringing discount grocer Aldi into as many as 10 stores later this year as the retailer looks to keep its sales growth momentum going.

CEO Kevin Mansell announced the move in a call with investors after the retailer's fourth quarter earnings report. Mansell said the moves would allow the company "to achieve further inventory reductions and margin acceleration as a result."

At the start of this year, Mansell had told CNBC the company had re-adjusted the square footage of 300 stores over the past several years. He said the company had "a whole list of partners" ready to fill the leftover space. Kohl's is expected to eventually expand the Aldi presence to many of these 300 stores.

The Kohl's-Aldi partnership would seem to have two benefits: driving shopper traffic to Kohl's and helping Aldi accelerate its already-aggressive expansion plans across the U.S.

For the fourth quarter ended Feb. 3, Kohl's reported a 6.3% increase in same-store sales. The company's net income rose to $468 million, or $2.81 a share, compared with $252 million, or $1.44 per share, a year ago. Kohl's said new tax legislation boosted its profits by $136 million.

Excluding one-time items, Kohl's earned $1.99 a share, 22 cents ahead of analysts' expectations.

Revenue for the fourth quarter climbed 9.2 percent to $6.78 billion, while analysts were calling for sales of $6.74 billion.

Kohl's said more controlled inventory levels helped profit margins and boosted sales, as stores had a cleaner appearance overall.

Looking to fiscal 2018, Kohl's is calling for same-store sales to be flat to up 2 percent, while total revenue is expected be in the range of down 1 percent to up 1 percent. Earnings for the year should fall within a range of $4.95 to $5.45 a share, Kohl's said. Analysts had been calling for full-year earnings of roughly $4.72 a share.

“I am very pleased with our fourth quarter and full year results, which exceeded the high end of our most recent guidance by $0.11 per share. Over the course of the year, we saw consistent, sustained improvement in sales trends which culminated in a 6.3% increase in our fourth quarter comp sales. We improved our merchandise margins through strong inventory management and improved promotional and permanent markdowns. All areas effectively managed their expenses. And, we ended the year with 7% less inventory. I am very proud of our team and the role they played in these results and want to thank them for their hard work, loyalty and dedication,” Mansell said.

Kohl's ended the fiscal year with 1,158 Kohl's stores in 49 states. During 2017, the company opened four Kohl's stores, relocated one Kohl's store and opened one Off/Aisle location.