) is set to report its fiscal fourth quarter 2012 results on Feb
28. Last quarter it posted a positive surprise of 4.60%. Let's
see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Kohl's comparable store sales, improvement in inventory and
growing e-commerce business drove the third quarter. The company
posted decent third quarter fiscal 2012 results which exceeded
both the Zacks Consensus Estimate and the prior-year quarter
earnings, owing to growth in revenues and comparable store sales.
Kohl's comparable store sales increased, driven by an improvement
in inventory levels. However, gross margin declined due to
increased cost of merchandise.
Our proven model does not conclusively show that Kohl's is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
)and a Zacks Rank #1, #2 or #3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
The Earnings ESP is -1.18%. That is because the Most Accurate
Estimate stands at $1.62, while the Zacks Consensus Estimate is
higher at $1.63, which results in ESP of -0.61%.
Zacks Rank #4 (Sell):
We caution investors against this stock as it carries a Zacks
Rank #4 (Sell), especially when the company is seeing negative
estimate revisions momentum. Kohl's has witnessed a downward
pressure on estimates after it cut its guidance last month,
following disappointing holiday season sales in December.
The poor performance in the holiday season due to unfavorable
weather conditions has not only lowered consumer confidence but
also forced Kohl's to give more-than-expected discounts to its
customers. This is also reflected in company's December
comparable store sales, which increased year over year, but were
lower than the company's expectations.
Though January sales were impressive, Kohl's failure to
generate expected sales in the holiday season led to lowering of
the company's fourth quarter and fiscal year guidance. The
company now expects earnings in the range of $1.60 to $1.62 for
the fourth quarter and $4.11 to $4.13 for fiscal 2012 versus its
previous guidance of $2.00 to $2.08 for the fourth quarter and
$4.52 to $4.60 for fiscal 2012.
Other Stocks to Consider
Here are some other companies in the retail and wholesale
sector you may want to consider as our model shows they have the
right combination of elements to post an earnings beat this
), Earnings ESP of +1.35% and Zacks Rank #1 (Strong Buy)
New York & Co
), Earnings ESP of +12.50% and Zacks Rank #2 (Buy)
), Earnings ESP of +1.27% and Zacks Rank #3 (Hold)
EXPRESS INC (EXPR): Free Stock Analysis
KOHLS CORP (KSS): Free Stock Analysis Report
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PRICESMART INC (PSMT): Free Stock Analysis
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