Kohl’s stock price testing 16-month highs after topping Q4 earnings and sales

Written by: Michael Harris
March 4, 2021
  • Kohl’s reported adjusted earnings per share of $2.22, compared to analysts’ estimates of $1.01
  • Revenue came in at $5.88 billion to top the expected $5.86 billion
  • Since November, shares of the company are trading in a continuous uptrend, resulting in gains of nearly 200%

Shares of Kohl’s (NYSE: KSS) are enjoying a great bull run after the company reported  better-than-expected fourth-quarter earnings and sales, indicating a robust growth in 2021.

Fundamental analysis: Dividend reinstated

Department store retail chain said it plans to reinstate its dividend and buy back shares after facing pressure from activist investors. 

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The largest department store chain in the U.S. has been looking to drive clients to online shopping and include new brands that sell home accessories, fitness gear, and makeup to attract interest. 

Kohl’s has also been working to slash expenses and inventories, something that has helped boost the company’s profits.

“After an extraordinary year managing through the pandemic, we ended the year in a very solid financial position, and we enter 2021 with strong momentum,” said Kohl’s CEO Michelle Gass in a statement.

For the quarter that ended on January 30, Kohl’s reported adjusted earnings per share of $2.22, compared to analysts’ estimates of $1.01 and revenue of $5.88 billion against the expected $5.86 billion, according to Refinitiv.

The company reported a net income of $343 million, or $2.20 per share, up from $265 million, or $1.72 a share, a year ago. Kohl’s online sales soared by 22% compared to a year ago and represented 42% of its total sales.

Kohl’s is expected to roll out its own athleisure brand called FLX in an effort to capitalize on the high demand for athletic apparel.

Technical analysis: Testing multi-year highs

Kohl’s stock price enjoyed a robust few last months. Since November, shares of the company are trading in a continuous uptrend, resulting in gains of nearly 200%. Last month, Kohl’s share price gained over 25% to have a big bullish close on a monthly chart.

Kohl’s daily chart (TradingView)

This former resistance confluence around the $50 mark will now continue to support the price action going forward. Yesterday’s high of $58.74 is the highest shares traded since November 2019. The buyers are now targeting the 2019 highs above the $59 handlee.

Summary

Kohl’s posted better-than-expected earnings and sales for the fourth quarter ended January 30, pointing to growth momentum in 2021, sending its shares further higher.