The first batch of retail Q1 results are in and I’m going to start touching on some of them.
Kohl’s came out swinging with some extremely strong numbers for the quarter: 16% increase in sales, 6.9% increase in comp store sales, and quarterly profits up 34%. President Kevin Mansell says that there were strong sales in the contemporary and updated lifestyle classifications of women’s apparel, with strong response to the introduction of Chaps brand for Women, by Polo Ralph Lauren Corp, and the private AB Studio brand. Across the store, Chaps for Boys and Tony Hawk for Young Mens & Boys also saw positive response.
From marketwatch.com’s coverage of the conference call:
In response to an analyst’s question, Chairman and Chief Executive Larry Montgomery said Kohl’s has had only limited experience competing against a new, off-mall store format that J.C. Penney is beginning to roll out more rapidly this year. While Kohl’s stores have typically taken a short-term sales hit when a new Penney store opens nearby, they soon recover to normal levels, he said.
“I would suggest that probably when we open up, we probably hit them harder than when they open up,” Montgomery said.
Jeremy MacNealy at the motleyfool thinks very highly of Kohl’s stock right now, noting:
As a result of new brand and marketing initiatives to draw first-time customers to the stores, transactions for the quarter were up 4.8% compared to the same period a year ago. On top of this, transaction value rose 2.1% year over year, leading to overall comparable same-store growth of 6.9%.
He goes on to say:
Prospective investors will want to inspect the company’s free cash flow generation once the figures are made available in its 10-Q filing. But from just an earnings perspective, at roughly 18 times projected current-year earnings, this stock is reasonably priced, given the kind of growth rates we are currently witnessing. The market may be soaking sweat with concern, but Kohl’s shareholders have good reason to keep smiling.
More in his article, Kohl’s is Cruising.
Full SEC Form 8-k filing here, via Yahoo.