Vehicles sit parked in front of a Kohl’s department store in Ashland, Ky.
Luke Sharrett | Bloomberg | Getty Images
Kohl’s shares tumbled Thursday, despite the company reporting fiscal-first quarter profit and sales that exceeded expectations and hiking its full-year forecast.
It hinted at additional costs and supply chain headwinds that it may face in the remainder of 2021, as it bounces back from a falloff in shopper demand a year earlier, but uncertainty abounds. Kohl’s stock closed Thursday down about 10%.
The shares followed a similar trend as that of Walmart and Lowe’s, which both reported strong earnings results earlier in the week and then their stocks lose momentum throughout the day. Some investors are cautious about how long the fervent demand coming out of the pandemic will last, especially as stimulus checks are spent.
Kohl’s results are also not as strong when compared with those before the Covid pandemic, according to GlobalData Retail Managing Director Neil Saunders.
“Good growth was always inevitable given the terrible results of last year,” Saunders said about Kohl’s lapping a period when its stores were forced shut during the health crisis. “While the company is on a steep recovery trajectory, it has not fully dug itself out of the hole that the pandemic created.”
Here’s how Kohl’s did for the quarter ended May 1, compared with what analysts were anticipating, based on a Refinitiv survey:
- Earnings per share: $1.05 adjusted vs. 4 cents expected
- Revenue: $3.89 billion vs. $3.48 billion expected
Kohl’s net income climbed to $14 million, or 9 cents per share, from a loss of $541 million, or $3.52 per share, a year earlier. Excluding one-time adjustments, the company earned $1.05 per share, outpacing expectations for 4 cents in Refinitiv’s survey.
Revenue soared nearly 70% to $3.89 billion from $2.43 billion a year earlier. That beat expectations for $3.48 billion.
The company said its store sales more than doubled during the quarter, while digital sales rose 14% year over year, to represent 30% of total sales. It didn’t break out same-store sales figures.
Kohl’s Chief Executive Michelle Gass said momentum built throughout the quarter, especially in stores, where the retailer has been investing in new private label brands and refreshing displays in activewear, women’s apparel and beauty. Activewear sales showed the most significant growth in the first quarter, Gass said, rising at a mid-teens percentage rate from 2019.
“The U.S. consumer is in a stronger position [and] spending has picked up, driven by stimulus, easing Covid-19 restrictions and people resuming more normalcy in their daily lives,” Gass said during an earnings call. “These factors are helping to reignite growth for the retail industry and we are positioned extremely well to capitalize on this acceleration.”
Kohl’s expects full-year adjusted earnings per share to range from $3.80 to $4.20, up from $2.45 to $2.95.
Net sales are estimated to rise in the mid-to-high teens percentage range, compared with a previous expectation of a mid-teens percentage jump.
Analysts had been looking for adjusted earnings of $3.15 per share, with sales rising 19.3% for the year, according to Refinitiv.
Telsey Advisory Group research analyst Dana Telsey estimates that the sales outlook provided from Kohl’s would equate to a range of about $17.14 billion to $17.89 billion. That would still be below the $18.89 billion in revenue that the company booked in 2019.
Gass told analysts the company is being more cautious in its outlook because of potential cost headwinds and supply chain disruption that the company could face throughout the year.
Later this fall, Kohl’s is preparing to bring the beauty retailer Sephora into about 200 of its stores, growing to 850 locations by 2023. The company hopes the initiative will help it to drive traffic and reach a younger customer. It has simultaneously been growing its roster of national brand partners, including Levi’s, Lands’ End and Eddie Bauer.
It also said it is preparing to launch another group of private-label brands, following the recent debut of its new active line FLX. Kohl’s is on track to grow its active business to represent 30% of total sales in the next few years.
As of market close Thursday, Kohl’s shares have risen more than 33% year to date. Kohl’s has a market cap of $8.5 billion, which is notably more than Macy’s and Nordstrom.
Clarification: A previous version of this story misstated that Target shares had fallen Wednesday after it reported earnings.
RH beats earnings, hikes outlook as retail rebound boosts high-end home goods; shares jump
Shares of the high-end furniture retailer surged Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.
Jason Kempin | Getty Images Entertainment | Getty Images
Shares of the high-end furniture retailer RH surged in extended trading Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.
RH also hiked its full-year outlook, building on the momentum it’s seeing in the luxury home category, and gave a stronger-than-expected sales forecast for the second quarter.
In a letter to shareholders, Chief Executive Officer Gary Friedman said the remainder of this year “will surely be a tale of two halves” for the retail industry. But he said that “the un-masking of the general public could lead to a Roaring Twenties type of consumer exuberance.”
The company’s stock was last up more than 7%.
Here’s how RH did in the quarter ended May 1 compared with what analysts were anticipating, using Refinitiv estimates:
- Earnings per share: $4.89 adjusted vs. $4.10 expected
- Revenue: $861 million vs. $758 million expected
RH’s net income for the fiscal first quarter grew to $130.7 million, or $4.19 per share, compared with a loss of $3.2 million, or 17 cents per share, a year earlier. Excluding one-time adjustments, it earned $4.89 per share, topping expectations for $4.10.
Revenue surged 78% to $861 million from $483 million a year earlier. That also beat expectations for $758 million.
Friedman said that a strong housing and renovation market, a record stock market, low interest rates, and the reopening of the U.S. economy all bode well for the company in the quarters ahead.
RH hiked its fiscal 2021 outlook for revenue growth to a range of 25% to 30%, compared with a prior range of 15% to 20%. Analysts had been looking for a 19.7% increase year over year.
For its fiscal second quarter, RH expects revenue to grow 35% to 37%. Analysts had been looking for a 27.2% jump.
The company is preparing to kick off its global expansion in the spring of 2022, starting with England. To drive future growth, it is also considering expanding into new services, potentially into areas such as landscape architecture. It currently offers interior design consulting.
RH shares are up roughly 37% year to date. The company has a market cap of about $13 billion.
Blue Origin auctions seat on first spaceflight with Jeff Bezos for $28 million
The winning bidder will fly to the edge of space with the Amazon founder on Blue Origin’s New Shepard rocket scheduled to launch on July 20.
A New Shepard rocket launches on a test flight.
Jeff Bezos‘ space venture Blue Origin auctioned off a seat on its upcoming first crewed spaceflight on Saturday for $28 million.
The winning bidder, whose name wasn’t released, will fly to the edge of space with the Amazon founder and his brother Mark on Blue Origin’s New Shepard rocket scheduled to launch on July 20. The company said it will reveal the name of the auction winner in the coming weeks.
Bidding opened at $4.8 million but surpassed $20 million within the first few minutes of the auction. The auction’s proceeds will be donated to Blue Origin’s education-focused nonprofit Club for the Future, which supports kids interested in future STEM careers.
Blue Origin director of astronaut and orbital sales Ariane Cornell said during the auction webcast that New Shepard’s first passenger flight will carry four people, including Bezos, his brother, the auction winner and a fourth person to be announced later.
New Shepard, a rocket that carries a capsule to an altitude of over 340,000 feet, has flown more than a dozen successful test flights without passengers, including one in April at the company’s facility in the Texas desert. It’s designed to carry up to six people and flies autonomously — without needing a pilot. The capsule has massive windows to give passengers a view of the earth below during about three minutes in zero gravity, before returning to Earth.
Blue Origin’s system launches vertically, and both the rocket and capsule are reusable. The boosters land vertically on a concrete pad at the company’s facility in Van Horn, Texas, while the capsules land using a set of parachutes.
The interior of the latest New Shepard capsule
July 20 is notable because it also marks the 52nd anniversary of the Apollo 11 moon landing.
VSS Unity fires its rocket engine shortly after launching on its third spaceflight on May 22, 2021.
Bezos and fellow billionaires Elon Musk and Sir Richard Branson are in a race to get to space, but each in different ways. Bezos’ Blue Origin and Branson’s Virgin Galactic are competing to take passengers on short flights to the edge of space, a sector known as suborbital tourism, while Musk’s SpaceX is launching private passengers on further, multi-day flights, in what is known as orbital tourism.
Both Blue Origin and Virgin Galactic have been developing rocket-powered spacecraft, but that is where the similarities end. While Blue Origin’s New Shepard rocket launches vertically from the ground, Virgin Galactic’s SpaceShipTwo system is released mid-air and returns to Earth in a glide for a runway landing, like an aircraft.
Virgin Galactic’s system is also flown by two pilots, while Blue Origin’s launches without one. Branson’s company has also flown a test spaceflight with a passenger onboard, although the company has three spaceflight tests remaining before it begins flying commercial customers – which is planned to start in 2022.
SpaceX launches its Crew Dragon spacecraft to orbit atop its reusable Falcon 9 rocket, having sent 10 astronauts to the International Space Station on three missions to date.
In addition to the government flights, Musk’s company is planning to launch multiple private astronaut missions in the year ahead – beginning with the all-civilian Inspiration4 mission that is planned for September. SpaceX is also launching at least four private missions for Axiom Space, starting early next year.
Blue Origin’s auction may have netted $28 million, but a seat on a suborbital spacecraft is typically much less expensive. Virgin Galactic has historically sold reservations between $200,000 and $250,000 per ticket, and more recently charged the Italian Air Force about $500,000 per ticket for a training spaceflight.
Musk’s orbital missions are more costly than the suborbital flights, with NASA paying SpaceX about $55 million per seat for spaceflights to the ISS.
SpaceX’s Crew Dragon spacecraft named “Resilience” is seen docked to the International Space Station.
GameStop sales rise 25% as retailer chases e-commerce growth, says it may sell 5 million shares
GameStop sales rose 25% in the fiscal first quarter as the company focuses on e-commerce and tries to stage a turnaround.
SELINSGROVE, PENNSYLVANIA, UNITED STATES – 2021/01/27: A woman walks past the GameStop store inside the Susquehanna Valley Mall. An online group sent share prices of GameStop (GME) and AMC Entertainment Holdings Inc. (AMC) soaring in an attempt to squeeze short sellers.
Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images
GameStop‘s sales rose 25% in the fiscal first quarter, as the video game retailer embarks on a turnaround strategy partially fueled by a Reddit-inspired stock rally. The company also named former Amazon executive Matt Furlong as its new CEO.
Shares fell more than 12% in extended trading on Wednesday, after the company declined to provide an outlook for the year and said it may sell as many as 5 million shares.
Here’s how the company did for the fiscal first quarter ended May 1, compared with Refinitiv consensus estimates:
- Loss per share: 45 cents per share adjusted vs. 84 cents expected
- Revenue: $1.28 billion vs. $1.16 billion expected
In the quarter, GameStop reported that its net loss narrowed to $66.8 million, or $1.01 per share, from a loss of $165.7 million, or $2.57 per share, a year earlier. Excluding items, the company had a loss of 45 cents per share. Analysts were expecting GameStop to report a loss of 84 cents per share, according to Refinitiv.
Total revenue grew to $1.28 billion from $1.02 billion a year earlier, topping Wall Street’s expectations of $1.16 billion.
The company declined to provide a forecast for the year. It said sales momentum continued into the second quarter, with total sales in May increasing about 27% compared with the same month a year ago.
GameStop filed a prospectus with the Securities and Exchange Commission to sell up to 5 million shares of its stock from time to time, in “at-the-market” offerings. The funds it raises through these stock sales will be used for general corporate purposes, investing in growth initiatives and strengthening its balance sheet, the company said.
As of May 1, GameStop said, it had paid off its long-term debt and no longer had any borrowings under its asset-based revolving credit facility.
The video game retailer’s stock has gyrated wildly over the past several months as retail traders have shared tips on Reddit and tried to fuel short squeezes for companies including GameStop, AMC Entertainment, Bed Bath & Beyond and Clover Health — collectively the group has become known as meme stocks.
GameStop’s shares are up 1,506% so far this year. Its shares have swung from a 52-week low of $3.77 to a 52-week high of $483. As of Wednesday’s close, shares were $302.56. Its market value is $21.41 billion.
The trading frenzy has gotten the attention of the SEC. In a filing Wednesday, GameStop said it had received a request from the SEC on May 26 to voluntarily provide documents and information. The company said it was reviewing that request and planned to cooperate.
GameStop has tried to catch investors’ attention in other ways, as it focuses more on e-commerce and poaches talent from other companies. This spring, it tapped Chewy co-founder Ryan Cohen to lead efforts to grow the online business. He was named chairman at a shareholder meeting Wednesday. The company also hired several former Amazon executives, including Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, its chief growth officer.
Yet some analysts are unconvinced that the longtime brick-and-mortar retailer can pivot its business and believe the company has been propped up by speculation.
Loop Capital analyst Anthony Chukumba dropped his coverage of GameStop earlier this year following the Reddit frenzy. He told CNBC that the video game retailer’s challenges run deep regardless of who it hires.
“It’s great that these guys worked at Amazon. Amazon is a very successful retailer that I do cover, that I’m very familiar with, but at the end of the day, GameStop’s problems have very little, if anything, to do with e-commerce,” Chukumba said on CNBC’s “Closing Bell.”
“Their problem is not that they’re not a good omnichannel retailer. The problem is that gamers are increasingly downloading video games,” he added. “Look, they can hire Jeff Bezos when he comes back from space. … It’s not going to make a difference. The symptoms are not aligned with the medicine that the doctor is giving them. You can hire anyone you want from Amazon — not going to make a difference.”
— CNBC’s Kevin Stankiewicz contributed to this story.
Correction: GameStop named former Amazon executive Matt Furlong as its new CEO. An earlier version of this story misstated his first name.
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