Kohl’s (KSS) Ready to Report First Quarter Earnings: Is It Going to be a Record? – May 27, 2024

Kohl Company (KSS – Free Report) is likely to see declines in both earnings and profit when it reports fiscal first-quarter 2024 earnings before the opening bell on May 30. The Zacks Consensus Estimate is for revenue of $3.54 billion, representing a decline of 0.9% in comparison with data from the previous quarter.

The consensus estimate for quarterly earnings has fallen 2 cents to 4 cents per share over the past 30 days. This represents a decrease of 69.2% compared to the previous quarter’s data. However, KSS surprises with results for the last four quarters, averaging 84.2%.

Factors to pay attention to

Kohl’s has been experiencing pressure on its online business for some time now. This trend continued in the fourth quarter of fiscal 2023, with digital sales (excluding week 53) declining 16.5%. The continuation of this trend could have had an impact on revenues in the quarter under review. Additionally, the uncertain macroeconomic landscape due to inflation and interest rate increases remains a factor. We expect comparable sales to decline by 0.4% in the first quarter.

However, Kohl’s progress on key priorities, including improving the customer experience, simplifying its value strategy, implementing disciplined inventory and expense management, and strengthening its balance sheet, is progressing well. The company benefits from operating in the country, which is a solid opportunity for development.

Kohl’s has modernized its home assortment by expanding certain categories and introducing new products, including in areas such as wall décor, glassware, ceramic décor, barware and lighting, among others. In addition to maintaining popular programs like bedding and baths, Kohl’s has updated its offerings to include more modern designs, frequent pattern and color updates, and a constant stream of stylish options to meet customers’ changing preferences.

The management board expects an increase in home sales in 2024 due to increased awareness of the expanded product range. This also bodes well for the analyzed quarter.

What the Zacks Model Reveals

Our proven model predicts Kohl’s will post record profits this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Kohl’s has an Earnings ESP of +85.06% and is currently sporting a Zacks Rank of #3. With our Earnings ESP filter, you can discover the best stocks to buy or sell before they are reported.

Other stocks with a favorable combination

Here are some other stocks worth considering, as our model shows they too have the right combination of elements to beat earnings this reporting cycle.

Dollar tree (DLTR – Free Report) currently has an Earnings ESP of +0.16% and a Zacks Rank of 3. The company is likely to see revenue growth when it releases first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Dollar Tree’s quarterly earnings is estimated at 7.6 billion, an increase of 4.2% compared to the amount recorded in the prior-year quarter. You can see complete list of today’s Zacks #1 ranked stocks here.

However, the Zacks Consensus Estimate for Dollar Tree’s quarterly earnings of $1.45 suggests a decline of 2.7% from the prior-quarter level. DLTR has been surprising with negative results for four quarters, by an average of 1.9%.

Bath & Body Works (BBWI – Free Report ) currently has an Earnings ESP of +5.23% and a Zacks Rank of 2. The Zacks Consensus EPS for first quarter fiscal 2024 is projected at 33 cents, unchanged year-over-year.

Bath & Body Works’ revenues are expected to decline year over year. The Zacks Consensus Estimate for quarterly revenue is expected to be $1.37 billion, representing a decline of 2.1% from the prior-year quarter’s figure. BBWI surprises with results for the last four quarters, averaging 23.2%.

American Eagle Outfitters (AEO – Free Report) currently has an Earnings ESP of +3.98% and a Zacks Rank #3. The company is likely to see earnings growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate is that quarterly earnings per share of 28 cents suggests an increase of 64.7% from the year-ago quarter.

American Eagle Outfitters’ revenues are expected to increase year over year. The consensus revenue estimate is $1.15 billion, up 6.2% from the year-ago quarter. AEO has been surprising with results for the last four quarters, which amount to an average of 22.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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