Walmart Misses, Kohl's Beats, Stocks React

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NEW YORK ( TheStreet) - The stocks of two big department stores, Wal-Mart Stores ( WMT) and Kohl's ( KSS) performed vastly different on Thursday, despite both retailers reporting earnings results that missed revenue expectations.

Shares of Wal-Mart, the world's largest retailer, stumbled after it reported that sales in its U.S. stores fell, even with a more positive outlook for the second quarter. The stock was trading down 2.1% to $78.20 in trading Thursday.

Wal-Mart said net income attributable to the company for the first quarter was $3.8 billion, up 1.1% from a year earlier. Diluted earnings per share attributable to Wal-Mart rose 4.6% to $1.14 a share, the company said in a press release Thursday.

Wal-Mart's net sales for the quarter came in at $113.4 billion, up 1% from last year. Total revenue for the quarter nudged higher by 1% to $114.2 billion.

Analysts, on average, expected the Bentonville, Ark.-based company to earn $1.15 a share on revenue of $116.4 billion.

Wal-Mart said sales in its U.S. stores fell 1.4% for the 13-week period through April 26, 2013. The company, with a market cap of $263 billion, blamed "a delay in income tax refund checks, challenging weather conditions, less grocery inflation than expected and the payroll tax increase."

The company said it expects same-store sales comps for both its U.S. stores to range from flat to up 2% for the second quarter. Wal-Mart expects second-quarter earnings per share to range between $1.22 to $1.27 vs. $1.18 a share it earned in the second quarter of 2012.

"We're encouraged by the start of sales in the second quarter because we've seen more normalized weather and we're getting past the main effects of the reduced tax refunds," Bill Simon, head of Wal-Mart's U.S. operations, said in the pre-recorded call.

Meanwhile, Kohl's ( KSS) shares surged Thursday after the retailer posted better-than-expected first-quarter earnings despite lower sales and profit. It too alluded to improved performance for the second quarter.

Kohl's net income fell 4% to $147 million in the first quarter from the prior year. Earnings per diluted share came in at 66 cents. Comparable-store sales fell 1.9% versus rising 2% in the 2012 quarter. Total revenue fell 1% to $4.19 billion.

Analysts, on average, expected Kohl's to report diluted earnings per share of 58 cents on revenue of $4.27 billion.

The stock was surging 4.9% to $52.08 at last check on strong volume. Earlier in the day, Kohl's shares hit a new 52-week-high of $52.94 shortly after the markets opened.

Kohl's said for its August-ending quarter it expects to post earnings between $1 and $1.08 a share. The guidance is based off of sales growth of 1% to 3% and comparable-store sales growth that would be flat to up 2% and includes share repurchases of $250 million.

"After a slow start, sales improved considerably in April as the weather finally improved in our most weather-sensitive regions," said Kevin Mansell, Kohl's chairman, president and CEO. Despite the lower-than-expected sales, we outperformed our earnings guidance as gross margin results and expense management were better than expected. Our inventory levels are consistent with our expectations."

Wal-Mart and Kohl's earnings come a day after Macy's ( M) reported better-than-expected earnings and a dividend increase.

Troubled retailer J.C. Penney ( JCP) reports Thursday after the markets close. The company already pre-announced that quarterly sales suffered a wider decline than expected. High-end retailer, Nordstrom ( JWN) also reports earnings after the bell.

-- Written by Laurie Kulikowski in New York.

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