Kohl’s (KSS) posted quarterly earnings of $2.20 per share, beating Zacks consensus estimate of $2.10 per share. That compares to earnings of $2.22 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 4.76%. A quarter ago, this department store operator was expected to post a profit of $0.69 per share when it actually produced a profit of $1.65, offering a surprise of 139.13 %.
In the past four quarters, the company has exceeded consensus EPS estimates four times.
The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.
Kohl’s shares are up about 12.6% year-to-date compared to the -8.2% decline in the S&P 500.
What’s next for Kohl’s?
With Kohl’s outperforming the market so far this year, the question on investors’ minds is: what’s next for the stock?
There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.
Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Before this publication of the results, the trend of estimate revisions for Kohl’s: mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.69 on $3.99 billion in revenue for the upcoming quarter and $6.62 on $20.07 billion in revenue for the current fiscal year.
Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, Retail – Regional Department Stores is currently in 22% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.
Signet (SIG), another stock in the broader Zacks Retail-Wholesale sector, has yet to report results for the quarter ended January 2022. Results are expected to be released on March 17.
This jewelry company is expected to post quarterly earnings of $4.91 per share in its next report, representing a year-over-year change of +18.3%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.
Signet revenue is expected to be $2.77 billion, up 26.6% from the prior year quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.