Analysts expect Kohl’s (KSS) net sales to rise 2.6% to $4.3 billion in the second quarter of fiscal 2018, in contrast to the ~1% decline it witnessed in the second quarter of fiscal 2017. They expect sales to rise 0.5% in the third quarter and fall 3.7% in the fourth quarter. The company has been focused on driving footfall at its stores.
Management stated that although the shift of its friends-and-family event leading up to Mother’s Day is expected to support its first- and second-quarter results, the calendar shift could impact its results in the latter half of the year. In the first quarter of fiscal 2018, the company’s net sales rose YoY (year-over-year) to $4.0 million from $3.8 million, while its total revenue rose 3.5% YoY to $4.2 billion. Its digital sales, of which mobile sales represented ~50%, rose 20%. Kohl’s comps rose 3.6%, compared with a 2.7% decline in Q2 2017.
Kohl’s growth strategy
In addition to improving its merchandise assortment, the company is improving its loyalty program. In May, the company launched a new generation of its loyalty program in 100 stores across eight markets. The new generation combines its three existing loyalty programs into one and gives loyalty members and Kohl’s cardholders access to sales events. Kohl’s is also looking to offer customers personalized offers and plans to waive shipping fees for elite members of the program.
The company is also pruning store areas and is looking at strategic partnerships to fill the free space to drive footfall. For the first few stores, the company is looking at inking deals with grocery stores. The company has already roped in Amazon to set up in stores-in-stores.
The company has remained focused on driving its digital and omnichannel sales growth. In the first quarter, ~30% of its digital sales were fulfilled by Kohl’s stores. The company is building six e-commerce fulfillment centers.