Kohl's misses estimates on delayed back-to-school shopping

Thu Aug 13, 2015 4:39pm EDT
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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...

The sign outside a Kohl's store is seen in Broomfield, Colorado February 27, 2014. REUTERS/Rick Wilking