Stock movement so far
Kohl’s (KSS) stock price has risen 1.8% on a YTD (year-to-date) basis as of December 12. The stock price of the mid-tier department store chain has been positively impacted in recent days by optimism about holiday sales and the news of the US Senate passing the tax reform bill. On December 4, the stock price of Kohl’s and peers Macy’s (M) and JCPenney (JCP) surged 4.4%, 6.7%, and 1.2%, respectively, as the US Senate passed the tax bill, which is expected to benefit high-tax-paying sectors like retail.
On a YTD basis, the 1.8% rise in Kohl’s stock lags the S&P 500 Index, which has risen 18.9% since the start of the year as of December 12. Stocks of peers Macy’s, Nordstrom (JWN), and JCPenney are down 28.3%, 4.6%, and 65.5%, respectively, on a YTD basis.
Optimism around the stock
In late November, Kohl’s CEO Kevin Mansell indicated strong Black Friday sales and traffic both in the company’s stores and online channel.
On November 9, Kohl’s announced its results for fiscal 3Q17, which ended on October 28, 2017. Kohl’s sales rose 0.1% in fiscal 3Q17 after declining for six consecutive quarters. The company beat the analysts’ sales expectations for fiscal 3Q17 but lagged the consensus earnings estimate. The company raised its earnings guidance for full-year fiscal 2017. Kohl’s stock rose 0.9% on November 9 in reaction to its fiscal 3Q17 results and updated earnings guidance.
Also, on November 10, Kohl’s stock was up 4.5% as Baird upgraded the department store’s stock rating to “outperform” from “neutral” and raised the price target to $47 from $46 per share.
This series on Kohl’s will discuss the trend in Kohl’s sales, margins, earnings, and the expectations for the fourth quarter. We’ll also look at analysts’ recommendations for Kohl’s stock. Let’s begin with a discussion on the company’s valuation in the next part of this series.