Send me real-time posts from this site at my email
Zacks

Kohl's Q2 Earnings Preview: Rebound Quarter in Store?

The Zacks Retail and Wholesale Sector has soared over the last month, tacking on nearly 15% in value and easily outperforming the S&P 500. Still, the sector is down roughly 14% year-to-date

Below is a chart illustrating the sector’s performance vs. the S&P 500 over several timeframes.


Image Source: Zacks Investment Research

A big-time player in the sector, Kohl’s KSS is on deck to reveal Q2 earnings on Thursday, August 18th, before market open.

Kohl’s is a department store chain that operates specialty department stores and an e-commerce site in the U.S, offering a vast selection of products.

In addition, the company carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of a C. How does the big-box retailer shape up heading into the quarterly print? Let’s take a closer look.

Share Performance & Valuation

Kohl’s shares have mightily struggled in 2022, losing nearly a third in value and vastly underperforming the S&P 500.


Image Source: Zacks Investment Research

Over the past month, however, KSS shares have tacked on a stellar 18% in value, crushing the S&P 500’s sizable return of 12.5%.


Image Source: Zacks Investment Research

Kohl’s forward price-to-sales ratio resides at a tiny 0.2X, well below its five-year median of 0.4X and representing a steep 84% discount relative to its Zacks Sector.


Image Source: Zacks Investment Research

In addition, the company carries a Style Score of an A for Value.

Quarterly Estimates

Analysts have been overwhelmingly bearish over the last 60 days, with six negative estimate revisions coming in. The Zacks Consensus EPS Estimate of $1.08 reflects a steep 56% year-over-year decrease in quarterly earnings.


Image Source: Zacks Investment Research

Kohl’s top-line appears to be undergoing some turbulence as well – the Zacks Consensus Sales Estimate of $4.1 billion registers an 8.4% decrease compared to year-ago quarterly sales of $4.5 billion.

Quarterly Performance & Market Reactions

Kohl’s has exceeded bottom-line estimates in three of its last four quarters, undoubtedly a positive. However, the company’s one miss came in its latest quarter, a negative EPS surprise of 86%.

The company’s top-line results have left much to be desired as of late, with Kohl’s recording back-to-back revenue misses. Below is a chart illustrating the company’s income on a quarterly basis.


Image Source: Zacks Investment Research

The market’s liked what it’s seen from Kohl’s, with shares moving up following two of its latest quarterly prints. However, following the company’s steep bottom-line miss in its latest quarter, shares lost roughly 9% of value.

Putting Everything Together

Kohl’s shares have tumbled year-to-date, but over the last month, shares have easily outperformed the general market.

In addition, shares trade at solid valuation levels, well below their five-year median and reflecting a steep discount relative to their sector.

Still, analysts have been bearish for the quarter, and estimates reflect a declining top and bottom-line.

Quarterly results have been mixed as of late, with the company widely missing the Zacks Consensus EPS Estimate in its latest quarter.

Heading into the print, Kohl’s KSS carries a Zacks Rank #5 (Strong Sell) with an Earnings ESP Score of 8.4%.


Want to Know the #1 Semiconductor Stock for 2022?

Few people know how promising the semiconductor market is. Over the last couple of years, disruptions to the supply chain have caused shortages in several industries. The absence of one single semiconductor can stop all operations in certain industries.

This year, companies that create and produce this essential material will have incredible pricing power. For a limited time, Zacks is revealing the top semiconductor stock for 2022. You'll find it in our new Special Report, One Semiconductor Stock Stands to Gain the Most.

Today, it's yours free with no obligation.

>>Give me access to my free special report.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Kohl's Corporation (KSS): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue