NEW YORK — A sharper focus on inventory management, merchandising and marketing helped Kohl’s Corp. post a 17.6 percent profit gain in the fourth quarter and a 20 percent increase for the year.
The Menomonee Falls, Wis.-based moderate retailer said in its earnings report after the market close Thursday that it would continue working on this same strategy for fiscal year 2006 while also improving the shopping experience for consumers.
For the quarter ended Jan. 23, Kohl’s said net income rose to $374.9 million, or $1.08 a diluted share, from $318.8 million, or 92 cents, in the prior-year period on sales that climbed 14 percent to $4.65 billion from $4.08 billion. Operating income for the quarter increased 17.3 percent to $621.6 million from $530 million. The gross margin rate in the quarter jumped to 33.9 percent of sales from 33.6 percent.
For the year, net income soared to $842 million, or $2.43 a share, from $703.4 million, or $2.04 a share, in the prior period on sales that gained 14.5 percent to $13.4 billion from $11.7 billion.
Larry Montgomery, chairman and chief executive officer, said in a statement that the company made “tremendous progress on our 2005 initiatives and are very pleased with the bottom-line results for the quarter and the year.
“We concentrated on inventory management, resulting in lower clearance levels and the best gross margin performance in our history,” the ceo said. “We have made great strides in broadening our assortment and are receiving positive feedback from our shoppers. We are attracting new customers and believe we are building momentum as a brand. In 2006, we will continue to focus on these initiatives: merchandise content, marketing, inventory management and the in-store shopping experience. These are the building blocks of a great retail strategy.”
The retailer said it opened 95 stories during the year, which brought the total to 732 in 41 states. As reported, the retailer is looking to expand its store base by 500 units over the next five years. In 2006, around 80 stores are expected to open.
During a conference call with analysts, Kevin Mansell, president, said the retailer was pleased with its initial spring selling “in all areas” of its business. “Chaps for women was advertised in our [ad circular] for the first time during our Presidents’ Day sale, and we believe it has had a very impactful presence in the store,” Mansell said.
Related Articles
You May Also Like
There will be “even more brand launches and extensions” this year in comparison to 2005, which is when Kohl’s announced its five-year expansion plan, he added. During an analyst meeting in August, the company said it was looking to deliver profits of $1.9 billion on sales of $24 billion. A cornerstone of the plan includes a reinvention of the retailer’s women’s wear offering as well as a push into new demographic targets. Over the past year, the retailer has rolled out brands such as Chaps and Candies while launching exclusives such as the American Beauty line with the Estée Lauder Cos. Inc.
Shares of Kohl’s closed down 1.1 percent to $44.51 on Thursday. The stock’s 52-week high is $58.90, and the low is $42.78.