NEW YORK (TheStreet) -- Kohl's (KSS) was one of the few Black Friday weekend winners, according to a note from analysts at Deutsche Bank published on Monday. Shares are flat at $59.62 in pre-market trading today.
While some analysts estimate that Black Friday sales were down 11% overall across the retail sector this year, analysts at Deutsche Bank believe that the retailer was able to attract more customers this year with good deals on electronics.
"In our view, KSS came out on top with what we think were better traffic trends YOY, luring shoppers with compelling deals on electronics despite limited SKU count. Moreover, we believe KSS will benefit in 4Q from successfully signing up thousands of customers to its new loyalty program and we have adjusted our SSS estimate by 50 bps to 2.1%," said analysts at the firm.
TheStreet Ratings team rates KOHL'S CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KOHL'S CORP (KSS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.19 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 37.22% is the gross profit margin for KOHL'S CORP which we consider to be strong. Regardless of KSS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KSS's net profit margin of 3.22% compares favorably to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.0%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Multiline Retail industry and the overall market, KOHL'S CORP's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: KSS Ratings Report