QUOTE AND NEWS
Market Intelligence Center  Aug 26  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithms on Kohl's Corp (KSS) could yield about 3.03% (7.68% annualized, for comparison purposes only) in 144 days. Pair a long position in the stock with the Jan. '15 $57.50...
SeekingAlpha  Aug 26  Comment 
By Tim McAleenan Jr.: When contemplating a new dividend growth investment, there are three things that may principally play a role in your decision to make an investment: the current valuation, the likelihood that the company will grow earnings...
SeekingAlpha  Aug 19  Comment 
By Aurium Investments: Kohl's (NYSE:KSS) has been trailing the market over the last five years. The stock price has barely budged over the period, growing only 10% compared to an increase of 94% for the S&P 500. It has also underperformed its...
Motley Fool  Aug 18  Comment 
There are five key points from Kohl's recent earnings conference call that investors should consider.
SeekingAlpha  Aug 18  Comment 
By Josh Arnold: After a rocky 2012, shares in discount retailer Kohl's (NYSE:KSS) rebounded nicely and recently, are trading at multi-year highs. The retailer has had some false starts in 2014 as well with some well publicized issues making shares...
Cloud Computing  Aug 15  Comment 
Qubell, an innovator in application deployment and configuration management, empowers online companies to do what they have never been able to do before: put into consumers' hands innovative new features and services, almost as fast as they can...
Motley Fool  Aug 14  Comment 
Kohl's reported its second-quarter earnings on Aug. 14, beating earnings and reversing a troubling trend.
Benzinga  Aug 14  Comment 
Midway through trading Thursday, the Dow traded up 0.26 percent to 16,694.18 while the NASDAQ surged 0.25 percent to 4,445.10. The S&P also rose, gaining 0.29 percent to 1,952.45. Leading and Lagging Sectors In trading on Thursday,...
StreetInsider.com  Aug 14  Comment 
The following is a list of notable articles to help get you through the lunch hour: Berkshire (BRK-A) Surpasses $200K/Share for First Time as Buffett's 'Bet on America' Pays Off -> Read this! S&P Cuts SeaWorld Entertainment (SEAS) to 'BB-';...
USAToday.com  Aug 14  Comment 
Wall Street is in the thick of earnings-reporting season for retailers.




 

Kohl’s (NYSE: KSS) is a U.S. department store chain that sells a mix of items including men's and women's apparel, home decor, and accessories. The department store appeals to middle-class consumers by selling discounted branded and private label clothing and home goods. Kohl's is in the same category of national department store competitors such as J.C. Penney (JCP) and Macy's Inc. (M).

Kohl's is vulnerable to a weak U.S. economy and declining consumer spending because the company has no stores outside of the US and does not have an international presence to serve as a buffer to fluctuations in the US economy. However, Kohl's discounted pricing allows it to ride out tough economic times better than its competitors.

Company Overview

Business Financials

Kohl’s operates specialty department stores and an e-commerce site in the United States that sell moderately-priced branded and private label merchandise.

Business Segments

Kohl's reports its sales in six different business segments:

  • Women's (32% o
  • Home (18% of net sales)
  • Children's (13% of net sales)
  • Accessories (10% of net sales)
  • Footwear (8% of net sales)

Kohl's stores and e-commerce site carries a variety of clothing, accessories and home goods. The company's merchandise offerings include products from branded manufacturers, such as Nike, in addition to exclusive and [[private labr Vera Wang and the Chaps brand that Kohl's offers exclusively from Polo Ralph Lauren (RL).

Business Growth

FY2010 (ended January 30, 2011)[1]

  • Net sales increased 7.1% to $18.4 billion.
  • Net income increased 12.4% to $1.1 billion.

Trends and Forces

Growing Kohl's Exclusive and Private Brands

Exclusive and private label merchandise account for almost half of Kohl's sales, a figure Kohl's has worked to increase by adding new exclusive brands like Helix, Mudd, Dana Buchman, and Hang Ten.

Department stores are increasingly seeking to distinguish themselves and earn higher profit margins by offering exclusive brands and private label brands. Exclusive brands are brands marketed under the wholesaler's name that are sold only in a particular chain; one exclusive brand at Kohl's is the Chaps line by Polo Ralph Lauren (RL). Private label brands are produced by wholesalers, but sold under the brand name of the retailer. Exclusive brands such as Simply Vera by fashion designer Vera Wang, can help draw customers into Kohl's stores, as the products can only be found at Kohl's. Kohl's own private label products are typically priced lower than branded merchandise, but have a higher profit margin for Kohl's as the retailer is able to receive the good at a lower cost by avoiding branded manufacturers.

Higher Raw Materials Costs May Force An Increase In Clothing Prices

In a recovering economy, the last thing that consumers want is higher prices, especially on necessities like clothing. Many in the fashion industry are expecting price increases of as much as $2 for a t-shirt. As consumers ease back into discretionary spending, higher clothing prices delay the recovery as they discourage spending. Companies like Kohl's rely on consumers spending money on clothes, and if higher prices discourage consumer spending, the company's bottom line will suffer due to these significant factors. blab

Competition

Kohl’s is one of the smallest national department store retailers. It competes primarily against other department stores, but also is facing increasing competition from discounters and mass merchandisers like Target (TGT) and Wal-Mart (WMT) as these companies grow their clothing and home goods categories.

Kohl's primary competitors are moderate-priced department stores, J.C. Penney (JCP), Macy's Inc. (M) and Sears Holdings (SHLD). Kohl's main points of differentiation from these other companies is Kohl's usage of the off-mall store model and low prices. These factors have played key roles in Kohl's ability to cope with recessionary environment while its competitors have lost more sales than Kohl's as shoppers trade down and visit malls less frequently.

References

  1. KSS 2010 10-K pg. 13
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