Discount department store chain Kohl's (NYSE: KSS) racked up impressive profits on sales increases in its fourth quarter. More customers shopped at Kohl's, though each one on average spent a little less. Earnings and sales figures for the fiscal year were up as well. The stock shot up over 5% on news of the positive earnings report.

IN PICTURES: 10 Tips For Choosing An Online Broker

Kohl's Latest Numbers
Kohl's earned $1.40 per share, or $431 million in net income, compared to $1.10, or $336 last year's quarter. Sales increased from $5.23 billion to $5.68 billion. The company relied on its exclusive value-priced brands such as Simply Vera Wang and Dana Buchman labels. While Kohl's went the route of promotions, they didn't rely on deep discounts to generate sales. The company predicted a continued soft market for retail department store operators.

Retail Rising
Despite the recent report on falling levels in consumer confidence, retail numbers have been getting better. Perennial laggard Sears Holdings (Nasdaq: SHLD), owner of Sears and KMart stores, had its best earnings report in a long time. KMart performance played an integral role, experiencing a 1.7% increase in revenue as Sears sales continued to decline, though less than previously. Macy's (NYSE: M), led by its new My Macy's program with emphasis on a local approach for stores, posted a fourth-quarter profit despite a slight decline in sales.

Retail appears to be slowly strengthening across the board. Apparel retailer the Limited (NYSE: LTD) beat earnings estimates, with $1.0l earnings per share against the expected 98 cents. Sales were up 2%. A recent analyst's note for Nike (NYSE:NKE) expects the athletic footwear retailer to reverse its slight decline in sales, gross margins, and grow sales and earnings in the near future.

Kohl's Challenges
Although the earnings report was impressive for Kohl's, it should be noted that the company's guidance was below analysts' previous views. EPS at 48 to 52 for the first quarter is under the 54 cent figure expected. For the full year, Kohl's is calling for same store sales growth of 1-3 %. This is on the heels of full year growth of same store sales of 5% this year, with a 4.5% mark in the last quarter. Kohl's and other retailers will continue to be challenged by the sluggish economy, but Kohl's executed well this last year.

Kohl's Prospects
While Kohl's and many of the other retailers across the board continue to profit despite a tough environment for increasing top-line revenue, expect Kohl's to continue to perform well in the year ahead. The stock price, which had come down from its 52-week high, has been resurgent, so price-conscious investors will want to wait for a pull back. Kohl's, like many other retailers, is showing signs of growing strength, and its business may take off when the economy finally gets going. Kohl's is a terrific company for the long-term, and with Kohl's continued show of strength, even in a tough economy, investors will want to be in on the stock at the best price they can get. (Find out what to do when the sun sets on a burgeoning market. For more information, read Recession-Proof Your Portfolio and Industries That Thrive On Recession.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  2. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  4. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  7. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  8. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  9. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  10. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  5. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  6. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!