A fall in top-line margin showed up on
bottom line, as profits per share dropped 8%.
In its second quarter ended August 2, the discount department store chain posted earnings of $112.1 million, or 33 cents a share. That result was down from the same period a year ago, when Kohl's earned $124.4 million, or 36 cents a share.
The earnings decline came despite the fact that the company's revenues jumped 14.9% to $2.21 billion.
Meanwhile, the company's results beat Wall Street's expectations and the company's revised guidance. Analysts surveyed by Thomson First Call were expecting Kohl's to earn 32 cents a share on $2.21 billion in revenue. Earlier this month, the company
projected that its earnings would come in at the top of its previously stated 30 cents to 32 cents a share range.
Of course, Kohl's
warned in July that it wouldn't meet its earlier guidance of 38 cents to 42 cents earnings per share. That warning was its second in the last two quarters.
Kohl's did not immediately provide guidance for the third quarter. Analysts are expecting the company to earn 44 cents a share on $2.54 billion in sales in the current period.
While overall sales at Kohl's increased at a rapid clip, they rose much more slowly on a comparable-store basis. The company's same-store sales, which compare results at like outlets open for more than a year, grew by just 1.1% in the quarter. In contrast, the company's same-store sales grew by 10.6% in the year ago quarter, and 5.4% in the second quarter of 2001.
As sales slowed, the company's gross profit margin declined as a portion of sales. Gross margin represents the difference between what a company charges customers for its products and what it pays suppliers for those products.
In the third quarter, the company's gross margin stood at 33.4% of sales, down 2.4 percentage points from the same period a year ago.
While the company's gross margins declined, it did gain some ground on its operating expenses. Marketing, general and administrative expenses fell by 59 basis points as a portion of sales to 21.5%.
Investors sold off Kohl's shares in regular trading on Thursday, as the stock traded down 46 cents, or 0.8%, to $61.04.