QUOTE AND NEWS
Forbes  Jul 11  Comment 
The most recent short interest data has been released by the NASDAQ for the 06/30/2014 settlement date, which shows a 2,547,025 share increase in total short interest for Kohl's Corp. (NYSE: KSS), to 26,562,210, an increase of 10.61% since...
Motley Fool  Jul 10  Comment 
Kohl's has had its share of issues lately, not unlike competitors Macy's and J.C. Penney. But its two biggest problems are fixable, and the stock is one of the few values remaining in this market.
Market Intelligence Center  Jul 10  Comment 
After Wednesday’s trading in Kohl's Corp (KSS) MarketIntelligenceCenter.com's patented algorithms uncovered a trade that offers a 3.96% return or 14.46% on an annualized basis (for comparison purposes only), while providing 5.08% downside...
Motley Fool  Jul 7  Comment 
Even if J.C. Penney is still a risky proposition for investors, the company is clearly moving in the right direction. When compared to peers Macy's and Kohl’s, the stock looks significantly undervalued. Upside potential may outweigh the risks...
Benzinga  Jul 2  Comment 
Cleveland Research commented on retail department stores sales in notes this week. Despite the firm's optimism on J.C. Penney's (NYSE: JCP) second quarter, Kohl's (NYSE: KSS) is facing near-term headwinds from soft sales. Analyst Matthew Delly...
Forbes  Jun 30  Comment 
These three retail stocks look attractive.
SeekingAlpha  Jun 24  Comment 
By Amal Singh: Off-price retailers thrive on volatility in consumer demand and misjudgment by designers, manufacturers, and full-price retail outlets for stocking their stores with new low-price products. Off-price and discount retailers benefit...
Market Intelligence Center  Jun 24  Comment 
For a hedged play on Kohl's Corp (KSS) MarketIntelligenceCenter.com’s algorithms selected the Oct. '14 $52.50 covered call for a net debit in the $50.06 area. That is also the break-even stock price for the covered call. This trade will return...
Market Intelligence Center  Jun 9  Comment 
After Friday’s trading in Kohl's Corp (KSS) MarketIntelligenceCenter.com's patented algorithms uncovered a trade that offers a 3.14% return or 8.76% on an annualized basis (for comparison purposes only), while providing 6.09% downside...




 

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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