MENOMONEE FALLS, Wis.-Controls over expenses and inventories helped fuel Kohl’s to a healthy 16.5 percent increase in net income for its fiscal second quarter, to $303 million.
According to Kevin Mansell, chairman, president and CEO, “prudent expense management” kept selling, general and administrative expenses in check in the quarter, which ended on July 30. SG&A dollars rose a meager 0.6 percent, and SG&A as a percentage of sales fell 75 basis points to 24.8 percent. Gross margin improved by 41 basis points to 40.3 percent—thanks, according to Mansell, to “disciplined inventory management” and the increased penetration of private and exclusive brands.
Net sales for the quarter rose 3.6 percent to $4.2 billion, including a same-store sales increase of 1.9 percent. For the third quarter, Kohl’s projected a total sales increase of 4 to 6 percent, with same-store sales expected to gain 2 to 4 percent. Mansell said the launch of the Jennifer Lopez and Marc Anthony apparel brands (which may eventually expand to include home products) would be a highlight of the third quarter.