Kohl's Beats by 2 Cents

The clothing chain guides the year in line.
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Kohl's

(KSS) - Get Report

reported a 27.4% jump in second-quarter earnings Thursday that beat expectations, driven by strong sales as well as tax benefits and accounting changes.

The midrange apparel chain said it earned $187.2 million, or 54 cents a share, up from $146.9 million, or 43 cents a share, in the same quarter last year. Wall Street analysts were expecting earnings of 52 cents a share, according to consensus estimates reported by Thomson First Call.

The retailer said its net sales for the quarter increased 15.6% to $2.9 billion, up from last year's $2.5 billion, and same-store sales increased 5.1%.

"As expected, we continued gaining momentum in comparable store sales in the second quarter, achieving the high end of our guidance for both comp-store sales and EPS for the quarter," the company said in a statement. "Looking forward, we continue to target comparable-store sales growth in the mid-single-digit range for the fall season. For the year, we continue to target earnings growth of approximately 20% over last year and now expect our earnings per diluted share for fiscal 2005 to be in the $2.42-$2.50 range."

Analysts polled by Thomson First Call are currently projecting annual earnings for Kohl's of $2.46 a share, on average.

Kohl's said its income taxes were decreased by $4.9 million because of "the resolution of certain state tax matters." Also, its gross margin rate benefited by $2.4 million from a change in inventory accounting.

During the quarter, the company opened 33 new stores, bringing its total store count to 670 stores in 40 states, compared with 589 stores in 38 states at the same time last year.

Its shares dipped 10 cents, or 0.2%, to $54.80 during regular trading hours. The earnings release came out after the closing bell.