Kohl’s management told analysts in a third quarter conference call that home is one of its best performing categories this year but also among those seeing cost increases the retailer is fighting in part by using reverse auctions.
Kevin Mansell, Kohl’s CEO said in the conference call, as transcribed by SeekingAlpha, “Home…reported low single-digit counts for the quarter and mid single-digit counts for the year-to-date period. The home business was driven by small electrics, seasonal table top, luggage.”
Although bringing in more dollars, footwear and home have been among the Kohl’s categories that have been most severely cost impacted over the past 12 months, Mansell said, and the retailer is doing what it can to maximize return in those businesses.
“Both footwear and home are leading the company in terms of sales increases for the year, and they are running slightly contrary to the company’s trends and average unit retail because they are living with higher costs,” Mansell said, adding that management has been instituting initiatives to “mitigate that impact. We’re doing things obviously like reverse auctions, which we’ve been a leader in…and we’re expanding it. That’s a really aggressive way to try to get cost to the lowest level.”
Kohl’s reported net income for the quarter ended October 30 of $194 million, or 63 cents per diluted share, versus $193 million, or 63 cents per diluted share, in the year-ago period. Net sales were $4.2 billion, an increase of 4.1% over last year’s quarter, and comparable store sales gained 1.8%.