Upcoming AWS Coverage on Dillard's Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 21, 2016 / Active Wall St. announces its post-earnings coverage on Kohl's Corp. (NYSE: KSS). The company posted its third quarter fiscal 2016 (Q3 FY16) earnings on November 10, 2016. The Menomonee Falls, Wisconsin-based company's diluted EPS surged 32% y-o-y. Meanwhile, excluding non-recurring items, diluted EPS rose 7% y-o-y, beating market consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Kohl's competitors within the Department Stores space, Dillard's, Inc. (NYSE: DDS), reported third quarter results on November 10th, 2016. AWS will be initiating a research report on Dillard's in the coming days.

Today, AWS is promoting its earnings coverage on KSS; touching on DDS. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=KSS

http://www.activewallst.com/registration-3/?symbol=DDS

Earnings Reviewed

In Q3 FY16, Kohl's reported sales of $4.33 billion compared to $4.43 billion in Q3 FY15. For the reported quarter, sales number came in above market expectations of $4.28 billion. In the reported quarter, comparable sales fell 1.7% versus a comparable sales growth of 1.0% in the prior year's quarter.

The specialty department store reported net income of $146 million, or $0.83 per diluted share, in Q3 FY16 compared to $120 million, or $0.63 per diluted share, in the prior year's comparable quarter. Excluding non-recurring items, the company's net income for Q3 FY16 came in at $142 million, or $0.80 per diluted share, compared to $144 million, or $0.75 per diluted share, in the year ago quarter. Additionally, Wall Street had expected the company to report adjusted earnings of $0. 67 per diluted share.

As on October 29, 2016, the company operated 1,155 Kohl's stores with gross footage of 99.2 million square feet and selling footage of 82.8 million square feet. During the reported quarter, the company inaugurated six new Kohl's stores, while closing one store.

Operating Metrics

During the three months ended October 29, 2016, the company's transactions per store were down 5.7% y-o-y. However, average transaction value increased 400 basis points, which comprised of a 210 basis point increase in units per transaction and 190 basis point increase in average unit retail.

For Q3 FY16, the company reported gross margin of $1.61 billion, or 37.1% of net sales, compared to $1.64 billion, or 37.1% of net sales, in the prior year's quarter. Operating income for Q3 FY16 fell marginally to $301 million from $308 million in Q3 FY15. However, the company's operating income margin improved marginally to 25.0% of net sales in Q3 FY16 from 24.8% of net sales in the year ago quarter.

Cash Flow and Balance Sheet

In the nine months ended October 29, 2016, net cash provided by operating activities was $1.28 billion compared to $407 million in the first nine quarters of FY15. Additionally, the company generated $599 million in free cash flow during the first nine months of FY16, an $825 million improvement over the first nine months of last year.

As on October 29, 2016, the company had $597 million in cash and cash equivalents compared to a balance of $501 million as on October 31, 2015. The company reported long-term debt of $2.79 billion in its books of accounts as on October 29, 2016.

During the reported quarter, the company had made incredible progress in its inventory reduction initiatives, reducing inventory per store by more than 9%. As a result, the company's accounts payable (AP) to inventory ratio increased almost 370 basis points to 44.4%.

Dividends and Share Repurchases

On November 09, 2016, Kohl's Board of Directors announced a quarterly cash dividend of $0.50 per share on its common stock. The dividend is payable on December 21, 2016, to shareholders of record at the close of business on December 07, 2016.

During first nine months of FY16, Kohl's repurchased 4 million shares of its common stock. Furthermore, the company's Board of Directors increased the outstanding share repurchase authorization under its existing program to $2 billion.

Earnings Outlook

In its guidance for full year FY16, Kohl's reaffirmed diluted earnings guidance range of $3.12 per share to $3.32 per share. Furthermore, excluding impairments, store closing and other costs, the company continues to anticipate diluted earnings to be in the range of $3.80 per share to $4.00 per share.

Stock Performance

Kohl's share price finished yesterday's trading session at $54.57, rising slightly by 0.11%. A total volume of 3.52 million shares exchanged hands. The stock has rallied 24.71% and 57.16% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have gained 18.68%. The stock is trading at a PE ratio of 16.75 and has a dividend yield of 3.67%.

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SOURCE: Active Wall Street