Cost Cuts, Exclusive Brands Drive Kohl's 3Q Profit

MAE ANDERSON

NEW YORK (AP) — Kohl's said it is set to battle it out for market share during the upcoming holiday season, as it reported Thursday that consumers responded to its exclusive brands and moderate prices and sent profit up 21 percent in the third quarter.

As the economy makes tentative steps toward a recovery, midpriced chain Kohl's has fared better than higher-priced department stores. Kohl's said it saw an increase in customers in the third quarter.

Sales in stores open at least one year — considered a key measure of a retailer's health — rose 2.4 percent during the three months ended Oct. 31. That was fueled by more transactions rather than an increase in transaction size, however, indicating that while there might be more customers, they are still spending less.

Still, it is the first rise in the sales figure since the second quarter of 2007, even though it's against a weak comparison with last year.

The results led the department-store chain to raise its full-year earnings guidance. But CEO Kevin Mansell said he expects consumers to "continue to be conservative" in their spending over the holidays.