Kohl’s Corp.’s (NYSE:KSS) third-quarter earnings fell 18% as the department-store chain reported weaker same-store sales and margins.
Shares were down 9.5% at $52.75 in recent premarket trading as earnings and revenue missed expectations and the retailer again cut its 2013 profit guidance. Through Wednesday’s close, the stock is up 36% this year.
Kohl’s now expects 2013 per-share earnings of $4.08 to $4.23, compared with its previously lowered estimate for a per-share profit of $4.15 to $4.35.
The disappointing results come a day after rival Macy’s Inc. (NYSE:M) on Wednesday reported strong third-quarter results and offered an upbeat view for the coming key holiday selling season. However, Macy’s third-quarter gains were driven by a greater emphasis on deals, which weighed on margins.
Analysts have warned the current holiday season could turn out to be one of the most promotional in recent years, as retailers try to attract shoppers with ever-deeper deals.
Both Macy’s and Kohl’s are among the growing number of retailers that plan to open some or all of their stores on Thanksgiving Day to extend the flurry Black Friday shopping, which historically has been known for big discounts to attract bargain-hunting shoppers.
On Thursday, Kohl’s Chairman and Chief Executive Kevin Mansell said the company thinks it is “well-positioned from a merchandise content and inventory perspective to gain market share” as it enters the holiday shopping season. The retailer also has stepped up its marketing spending to help improve customer traffic to its retail stores and website.
For the quarter ended Nov. 2, Kohl’s reported a profit of $177 million, or 81 cents a share, down from $215 million, or 91 cents a share, a year earlier. Revenue decreased 1% to $4.44 billion.
Kohl’s had projected per-share earnings of 83 cents to 92 cents, on sales growth of 1% to 3%.
Gross margin declined to 37.5% from 38.1%.
Same-store sales were down 0.1%, while analysts had expected growth of 0.7%.
For current quarter, Kohl’s forecast per-share earnings of $1.59 to $1.74 on a decline in total sales of 2% to 4%. Analysts polled by Thomson Reuters most recently expected per-share profit of $1.70 and a revenue decline of 3%.