Kohl’s, Macy’s Q2 Profit Tops View

Kohl’s Corp. (KSS) said its second-quarter net sales and earnings exceeded expectations. Based on the results, the company increased its full year 2021 guidance, which positions it to achieve many of the 2023 strategic goals in the current year, well ahead of plan.

While reporting strong second-quarter results, Macy’s, Inc. (M) increased its full-year and back-half guidance on both the top and bottom lines. Macy’s board has authorized a $500 million share repurchase program. The company also reinstated its regular quarterly dividend.

Kohl’s Corp. reported second-quarter adjusted earnings per share of $2.48 compared to a loss of $0.25, prior year. On average, 15 analysts polled by Thomson Reuters expected the company to report profit per share of $1.16, for the quarter. Analysts’ estimates typically exclude special items. Net income increased to $382 million from $47 million. Earnings per share was $2.48 compared to $0.30.

Kohl’s Corp.’s second-quarter net sales increased to $4.22 billon from $3.21 billion, last year. Total revenue was $4.45 billion compared to $3.41 billion. Analysts expected revenue of $3.99 billion, for the quarter.

For fiscal 2021, Kohl’s Corp. now projects adjusted earnings per share to be in the range of $5.80 to $6.10, excluding any non-recurring charges, revised from the previous expectation of $3.80 to $4.20. Net sales are now expected to increase in the low-twenties percentage range compared to the previous expectation of mid-to-high teens percentage range increase. Analysts expect the company to report profit per share of $4.35.

Shares of Kohl’s Corp. were up 3.8% in pre-market trade on Thursday.

Macy’s reported second-quarter adjusted earnings per share of $1.29 compared to a loss of $0.81, previous year. On average, 12 analysts expected the company to report profit per share of $0.14, for the quarter. Analysts’ estimates typically exclude special items. Net income was $345 million compared to a loss of $431 million, last year. Profit per share was $1.08 compared to a loss of $1.39.

Macy’s reported that its second-quarter net sales increased to $5.65 billion from $3.56 billion, previous year. Analysts expected revenue of $4.98 billion, for the quarter. Comparable sales were up 61.2% on an owned basis and up 62.2% on an owned plus licensed basis from 2020.

For fiscal 2021, Macy’s now projects adjusted earnings per share in a range of $3.41 – $3.75, revised from prior guidance of $1.71 – $2.12. Net sales are anticipated in a range of $23.55 billion – $23.95 billion, updated from prior guidance of $21.73 billion – $22.23 billion. Analysts expect the company to report profit per share of $2.24 on revenue of $22.12 billion. Adjusted EBITDA as a percent of sales is now estimated to be 11% – 11.5%, revised from prior outlook of 9% – 9.5%.

For the third-quarter, Macy’s projects adjusted earnings per share of approximately $0.17 to $0.26; and net sales of $5.04 billion to $5.19 billion. Analysts expect the company to report profit per share of $0.01 on revenue of $4.73 billion.

Macy’s increased its long-term adjusted EBITDA margin target to remain in the low-double digits beginning next year. Over the next couple of years, Macy’s expects capital expenditures to increase to approximately $1 billion, annually.

Macy’s is reinstating regular quarterly dividend at 15 cents per share. The dividend is payable on October 1, to shareholders of record at the close of business on September 15.

Shares of Macy’s were up 5% in pre-market trade on Thursday.

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