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Kohl's Bolsters Forecast

September same-store sales surge 16.3%.


(KSS) - Get Kohl's Corporation Report

posted strong September sales Tuesday and boosted its third-quarter earnings projections to reflect revenue from gift card "breakage."

The mid-tier department store operator's September same-store sales surged 16.3%. Total sales rose to $1.25 billion from $992.3 million.

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"We are extremely pleased with our sales performance in September," said Chairman and CEO Larry Montgomery in a statement. "We continue to see strong sales performance across all lines of business. All regions of the country experienced double-digit comparable store sales increases for the month."

The retailer now expects to post third-quarter earnings of 56 cents to 59 cents a share, up from an earlier target of 53 cents to 56 cents. Analysts polled by Thomson First Call have an average estimate for earnings of 56 cents a share.

Kohl's said it was raising its guidance because of the recognition of gift card breakage revenue, which relates to gift cards that are sold but not redeemed. The company said its total sales for September included $15 million related to the initial recognition of this type of revenue.

Shares of Kohl's were up $1.61, or 2.5%, to $67.10 in premarket trading.