Kohl's credits private and exclusive brand for 4Q gains
Home & Textiles Today Staff -- Home Textiles Today, February 24, 2011
Menomonee Falls, Wis. - Kohl's Corporation attributed its double-digit net income and high single-digit net sales and comp gains in both the fourth quarter and full 2010 fiscal year largely to rigorous inventory management practices and the ongoing strong performances of its myriad private and exclusive brands.
"We're very excited about the progress we made last year in both our private and exclusives national brands," said Kevin Mansell, chairman, president and ceo, during the mid-tier department store chain's earnings call this morning.
For the year, private and exclusive national brands reached approximately 48% of sales - almost 300 basis points higher than the prior year. And while there was "wide-spread successes" across both of these categories, some of the "very strongest increases" came from Kohl's exclusive national brands in our contemporary life zones - including Simply Vera Vera Wang, he explained.
"While the success of these helped propel our top line they also provided support to achieve a consistent improvement in merchandise margin," Mansell added.
Kohl's expects this trend to continue in this new fiscal year, especially in the second half of 2011 when the retailer is set to launch its Jennifer Lopez and Marc Anthony exclusive programs in apparel and accessories for men and women - representing Kohl's "largest brand initiative in terms of scope and investment we have ever made."
Net income for the quarter, ended January 29, increased 14% to $493 million, or $1.66 per diluted share, compared to $431 million, or $1.40 per diluted share, a year ago. Net sales grew by 6.3% to $6.0 billion versus $5.y billion in the 2009 fourth quarter. And comparable store sales for the quarter increased 4.3%.
For the year, net income jumped 11% to $1.1 billion, or $3.65 per diluted share, compared to $991 million, or $3.23 per diluted share, for fiscal 2009. Net sales increased 7.1% to $18.4 billion from $17.2 billion. And comparable store sales increased 4.4% over the prior year.
"We clearly outperformed our direct competition for the year, achieving the highest total sales increase for the year, leading to the largest market share gain," Mansell said.
Merchandise-wise for both the quarter and the year, footwear churned the strongest comp results, men's outperformed the company average, and home, too, outperformed the company for year with strength in small electrics.
E-commerce was a highlight yet again for Kohl's. Mansell said to help "ensure profitable growth," Kohl's is actively investing "prudently" for the long-term in its stores - both new and remodeled - as well as in its "high-growth" e-commerce business.
In the case of e-commerce, this segment's sales were up almost 60% in the quarter and almost 50% for fiscal 2010 to $720 million, and made a contribution to comp sales of about 200 basis points for the quarter and 130 basis points for the year
"Our investments in e-commerce continue to result in higher sales," Mansell noted.
On the storefront, Kohl's, which ended the year with 1,089 stores in 49 states, expects to open approximately 40 new sites and remodel 100 existing units in fiscal 2011.
The company also issued its initial guidance for fiscal 2011. Based on assumptions of a total sales increase of 4% to 6% and a comparable store sales increase of 2% to 4%, the Company expects earnings per diluted share of $4.05 to $4.25 for the year. For the first fiscal quarter, the company expects earnings per diluted share of $0.68 to $0.73 based on assumptions of a total sales increase of 4% to 6% and a comparable store sales increase of 2% to 4%.
"In 2011, we expect consumers to remain very interested in value and ways to make their dollars go further and we will remain focused on increasing market share," Mansell said.
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