Q1 2024 Kohls Corp Earnings Call Transcript
Key Points
- Sephora at Kohl's continues to deliver exceptional results, with a 60% increase in sales and over 20% comparable beauty sales growth.
- Inventory management has been effective, with a 13% decline in inventory and increased inventory turn.
- Gross margin expanded by 48 basis points to 39.5%, driven by strong inventory management and lower freight expenses.
- New categories such as home decor, pet products, and gifting have shown significant growth, with sales increases of over 30%, 100%, and 30% respectively.
- The company is making progress in its women's business, with regular price sales up 3% and positive trends in polished casual and dress offerings.
- First quarter results did not meet expectations, with net sales decreasing by 5.3% and comparable sales declining by 4.4%.
- Clearance activity was a significant headwind, representing more than a 600 basis point drag on comp sales.
- Spring seasonal product demand was softer than expected, impacting categories such as tees, shorts, and tanks.
- The activewear category accounted for the majority of the overall sales decline in the quarter.
- The company experienced softness in its legacy home offerings, including kitchen electrics, floor care, and bedding.
Good morning, and welcome to the Kohl's Corporation first-quarter 2024 earnings conference call. Please note that today's conference is being recorded. (Operator Instructions) It is now my pleasure to turn today's call over to Mark Rupe, SVP of IR and Treasury. Please go ahead.
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Thank you. Certain statements made on this call, including projected financial results in the company's future initiatives are forward looking statements. Such statements are subject to certain risks and uncertainties which could cause Kohl's actual results to differ materially from those projected in such forward looking statements.
Such risks and uncertainties include, but are not limited to those that are described in Item 1A in Kohl's most recent annual report on Form 10- K, and as may be supplemented from time to time in Kohl's other filings with the SEC. All of which are expressly incorporated herein by reference. Forward-looking statements relate to the date initially made, and Kohl's undertakes no
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