Earnings Preview: Kohl's Corp.

Kohl's Corporation (KSS) is expected to report Q3 earnings after market close Thursday Nov. 13, with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for a profit of 51c on revenue of $3.89B. The consensus range is 49c to 52c for EPS, and revenue of $3.8B to $4B, according to First Call. On November 6, Kohl's reported October same-store sales declined 9% vs. Retail Metrics estimate of a 6.7% decline and forecast Q3 EPS at the low end of the 51c to 56c view.

Analyst Views

Between the faltering economy, soaring food and gas prices, limited credit, slumping home prices and worries about jobs, shoppers remain unnerved and have cut back spending on discretionary items. Instead of spending at department stores, consumers are flocking to wholesale clubs and discount apparel chains.

Despite the difficult environment, Thomas Weisel believes the retailer is executing its strategy well and has a strong balance sheet. The company's October outlook suggests inventories will be down double-digits per foot and gross margins will be up for Q3 and analyst Liz Dunn believes the company will benefit from store closures in the retail arena. Additionally, Dunn says Kohl's is likely to pick up market share and stores from Mervyns, which is going out of business. At the same time, Dunn is not optimistic on 2009 and sees little positive news for retailers from the holiday season and into 2009.