Kohl's Net Falls 23 Percent in First Quarter
MENOMONEE FALLS, Wis.-First-quarter net income for Kohl's fell 23 percent to $154 million, the result of a lower-price strategy initiated by the retailer, according to Kevin Mansell, chairman, president and CEO.
That strategy--put in place "to provide greater value to our customers," Mansell said--played a key role in reducing gross margin by 219 basis points to 35.9 percent. Net sales in the quarter, which ended on April 28, edged up 1.9 percent to $4.2 billion. Same-store sales rose by just 0.2 percent.
Mansell credited Kohl's for "strong management of expenses" in the quarter. Selling, general and administrative expenses were flat on a dollar basis and declined 50 basis points as a percentage of sales, to 23.6 percent.
For the second quarter, Kohl's said it expects total sales to rise from 2 to 3 percent, with a same-store sales to range from flat to a 1 percent increase. Mansell said the retailer is positioning itself from an inventory perspective for back-to-school "to greatly improve our sales for the fall season."