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Kohl's Corp KSS Stock Quote

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Morningstar‘s Stock Analysis KSS

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Is it the right time to buy or sell?

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No-Moat Kohl's Bleak Outlook Puts Even More Pressure on Management; Shares Undervalued

David Swartz Equity Analyst

Analyst Note

| David Swartz |

No-moat Kohl’s eventful 2022 took another turn as the company revealed disappointing second-quarter results and a poor outlook. Management cited slowing sales due to inflation’s impact on spending by middle-income shoppers, necessitating discounts and causing margin compression. We expect to lower our $58 fair value estimate by nearly 10% as we slash our full-year $6.50 earnings per share forecast to align with current company guidance of $2.80-$3.20 (down from $6.45-$6.85). Despite this revision, we view Kohl’s, trading at about 10 times depressed earnings, as undervalued. Although its recent execution has left much to be desired, the company owns valuable real estate that it may monetize and remains committed to returning cash to shareholders through its current $2 per share annual dividend (6% yield) and a $500 million accelerated share-repurchase plan.

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Key Statistics KSS

Company Profile KSS

Business Description

Kohl’s operates 1,165 department stores in 49 states that sell moderately priced private-label and national brand clothing, shoes, accessories, cosmetics, and home furnishings. Most of these stores are in strip centers. Kohl’s also operates a large digital sales business. Women’s apparel is Kohl’s largest category, having generated 27% of its 2021 sales. The retailer, headquartered in Menomonee Falls, Wisconsin, opened its first department store in 1962.

N56 W17000 Ridgewood Drive
Menomonee Falls, WI, 53051
T +1 262 703-7000
Industry Department Stores
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 28, 2023
Stock Type High Yield
Employees 99,000

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