Why Jim Cramer Gave up on Kohl's Stock
Another case of better-than-feared?
Kohl’s reported a narrower-than-expected second quarter loss, reporting a loss of 25 cents per share. Analysts had expected a loss of 88 per cents per share.
Revenue of $3.4 billion exceeded estimates of $3.1 billion, but fell 23% from the same period last year. The retailer also saw digital sales increase 58%.
“During the second quarter we made significant progress in rebuilding our business. We reopened all of our stores with new safety and operating procedures, accelerated digital growth, and showed great discipline in managing inventory and expenses meaningfully lower. In doing so, we generated positive operating cash flow and further enhanced our financial position,” CEO Michelle Glass said in the earnings release.
The company reported ending the quarter with $2.4 billion in cash.
Gass added that the company is well-positioned to continue addressing the coronavirus pandemic for the near-term. “We are well-positioned to capitalize on evolving customer behaviors and the retail industry disruption, which we believe will drive long-term growth and increased market share,” Gass said.
When compared to the strong earnings delivered by Walmart and Home Depot, Kohl’s appears to be the runt of the retail litter. As of the opening bell, Kohl’s stock was down over 13% to $20.28.
Jim Cramer said he has given up on Kohl's stock and the company could soon join a long chain of forgotten department stores.
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