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Will Kohl’s Stock Recover This Year?

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Stock has fallen YTD

On a YTD (year-to-date) basis, Kohl’s (KSS) stock has fallen 26.5% to $36.30 as of June 22. For Kohl’s department store peers, the stock price movement hasn’t been impressive. The stock prices of Macy’s (M), Nordstrom (JWN), and JCPenney (JCP) have fallen 38.3%, 0.9%, and 47.3%, on a YTD basis. All of these department store stocks have underperformed the S&P 500 Index, which has risen 8.7% since the beginning of 2017.

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Movement since 1Q results

Kohl’s delivered mixed results for fiscal 1Q17, which ended on April 29, 2017. The company exceeded analysts’ earnings estimates but lagged the consensus sales estimate for fiscal 1Q17. The company’s stock fell 7.8% on May 11 due to its results. As you can see in the above chart, other department stores saw stocks fall significantly in May due to dismal 1Q17 results.

On June 8, Kohl’s stock price fell 5.8%. Macy’s CFO indicated margin pressure in an investor meeting, which reflects tough conditions in the department store sector. On June 20, Kohl’s stock price fell 4% as online retailer Amazon (AMZN) announced its new service—Prime Wardrobe.

As of June 22, Kohl’s stock has fallen 2.3% since its fiscal 1Q17 results.

Series overview

Kohl’s and other major department stores are struggling to drive their sales due to pressure from online retailers and discount stores. In this series on Kohl’s, we’ll discuss how the company is trying to improve its top line and margins. We’ll also compare Kohl’s valuation with its peers and look at analysts’ recommendations for Kohl’s stock.

In the next part, we’ll discuss Kohl’s sales.

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