Kohl's 4Q earnings rise; 2011 outlook falls short

[February 24, 2011]  MENOMONEE FALLS, Wis. (AP) -- Kohl's Corp.'s fourth-quarter net income increased 14 percent as merchandise profit margins improved through exclusive brand offerings and tight inventory management.

But the department store operator said consumers will remain cautious on spending in 2011 and gave a full-year earnings forecast below Wall Street's expectations.

Shares slipped 51 cents to $51.51 in premarket trading.

Kohl's earned $493 million, or $1.66 per share, compared with $431 million, or $1.40 per share, in the same period last year.

This narrowly beat analysts' $1.65 per share, according to FactSet.

Revenue for the period ended Jan. 29 climbed 6 percent to $6.04 billion from $5.68 billion, meeting Wall Street's view. Revenue at stores open at least a year rose 4.3 percent. The measure is considered a key gauge of a retailer's fiscal health because it excludes stores that open and close during the year.

Department stores saw falling sales as consumers turned to discount stores and hunted for bargains during the recession. But results have begun to improve. Kohl's, a midpriced department store, has focused on exclusive brands like Dana Buchman for women and Hang Ten for teens.

For the year, net income rose 12 percent to $1.11 billion, or $3.65 per share, from $991 million, or $3.23 per share last year.

Revenue rose 7 percent to $18.39 billion from $17.18 billion last year.

For the first quarter, the company expects net income of 68 cents to 73 cents per share on a revenue increase also of 4 percent to 6 percent, implying revenue of $4.20 billion to $4.28 billion.

Kohl's expects fiscal 2011 earnings of $4.05 to $4.25 per share. Analysts anticipate $4.37 per share.

It expects revenue to rise 4 to 6 percent, implying revenue of $19.12 billion to 19.49 billion. Analysts expect $19.36 billion.

"In 2011, we expect consumers to remain very interested in value and ways to make their dollars go further," said CEO Kevin Mansell.

Kohl's announced its first dividend Wednesday and said Thursday that it was boosting its buyback program.

[Associated Press]

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