NEW YORK (AP) — Kohl's reported on Wednesday that both profits and sales declined in the second quarter as the department store chain wrestles with shoppers' cautious spending in a challenging economy.
But the results beat Wall Street expectations as the retailer cut inventory and expenses. The department store chain also reaffirmed its annual guidance. Shares rose more than 2% in premarket trading.
Kohl's, based in Menomonee Falls, Wisconsin, is among the last group of retailers to report second-quarter results in an earnings season that has shown how still-high inflation, despite some easing, and higher interest rates are making shoppers cut back on discretionary items like clothing in order to afford their larger grocery bills.
On Tuesday, Macy's said it was forced to discount its spring goods to make room for fall and holiday merchandise in the face of customers’ cautious spending. But the retailer’s adjusted second-quarter profits and sales still topped Wall Street expectations.
Foot Locker said Wednesday it was cutting its full-year outlook again and pausing its quarterly dividend as sales dropped in its fiscal second quarter with consumers continuing to be more cautious about their purchases.
Nordstrom is slated to report its second-quarter results on Thursday.
Kohl's earned $58 million, or 52 cents per share, for the quarter ended July 29. That compares with $143 million, or $1.11 per share, in the year-ago period.
The company said it cut inventory by 14% compared with the year-ago period.
Total revenue fell to $3.9 billion in the quarter from $4.09 billion in the year-ago period.
Analysts were expecting 23 cents per share on revenue of $3.76 billion, according to FactSet analysts.
Comparable sales — those coming from stores and digital channels opened at least a year — fell 5%.