Kohl's Posts Powerful Gains
David Perry -- Furniture Today, March 12, 2007
Fueled by rising sales, beefed up margins and tighter inventory controls, fourth-quarter profits at Kohl's Corp. soared up 29.3%, to $484.6 million from $374.9 million during the all-important Christmas quarter.
Sales jumped 16.7%, to $5.4 billion from $4.7 billion, boosted by new store openings. Same-store sales climbed 4.1% during the quarter, up 5.9% for the year.
Driving the profit growth, in addition to rising sales, the retailer strengthened average gross margin by 140 basis points, or 1.4 percentage points, to 35.3% from 33.9% during the same period a year ago. Costs were held in check, rising as a percentage of sales by just 30 basis points, or three-tenths of a percentage point, to 18.9% from 18.6%.
Under careful control, inventories grew slower than sales, rising 15.7%, vs. the 16.7% sales growth.
In another lift to the bottom line, the retailer slashed its interest costs by 46.8% during the quarter, to $10.0 million from $18.8 million a year ago, generating a cash savings of $8.8 million. Full-year savings totaled $30.4 million.
|Qtr. 2/3 (x000)||2006||2005||% change|
|Oper. Income (EBIT)||787,800||621,600||26.7|
|Per share (diluted)||1.48||1.08||37.0|
|Average gross margin||35.3%||33.9%||—|
|Oper. Income (EBIT)||1,814,800||1,416,200||28.1|
|Per share (diluted)||3.31||2.43||36.2|
|Average gross margin||36.4%||35.5%||—|
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