Kohl's misses estimates on delayed back-to-school shopping
By Sruthi Ramakrishnan
(Reuters) - Department store operator Kohl's Corp (KSS.N: Quote) reported lower-than-expected quarterly same-store sales as consumers delayed back-to-school shopping due to a shift in tax holidays to August.
Shares of the company, which also posted second-quarter sales and profit that fell short of analysts' estimates, skidded as much as 11.3 percent on fears that the company might not be able to meet its full-year forecast.
"Our sales results were below our plan as the shift of sales in tax-free states from July into August was larger than anticipated," Kohl's Chief Executive Kevin Mansell said in a statement.
U.S. states offer a three-day sales tax holiday on back-to-school purchases. The tax holiday has shifted to August from July in most states this year.
Kohl's largely caters to low- to middle-income customers for whom tax benefits are important for discretionary spending.
The company said it now expects full-year profit, excluding the impact of debt extinguishment, to come in at the low end of its forecast range of $4.40-$4.60 per share.
"Second-quarter results at KSS disappointed, leaving many investors worried that the company may fall short of 2015 same-store sales and EPS guidance, even after adjusted to the low-end of plan," Deutsche Bank analyst Paul Trussell wrote in a note.
Same-store sales rose only 0.1 percent for the quarter ended Aug. 1, much lower than the 1.7 percent rise expected by analysts polled by research firm Consensus Metrix. Continued...