Kohl's Corporation (NYSE:KSS) is entering the holiday season well prepared and positioned to serve customers after a blockbuster third-quarter. Immediate results indicate the company continues to shrug off the effects of COVID-19, helped by an increased focus on digital sales.
Kohl’s Plans
Likewise, the company remains focused on executing a new strategic framework with tremendous prospects of driving long-term values and profit growth. The retailer has also set sights on a disciplined capital management plan, all in the effort of reinstating dividends in the first half of 2021.
Going by third-quarter results that exceeded expectations, the retailer is on course to resume its dividend program. Kohl’s continues to strengthen its financial position, having already paid, in full, its revolver affirming a solid cash flow generation from the business.
However, the retailer continues to feel the effects of COVID-19, which has affected traffic to most of its retail outlets. Conversely, comparable store sales were down by 13% in the recent quarter as the pandemic negatively affected brick and mortar stores.
Robust digital sales growth helped offset losses in the brick and mortar stores. Kohl’s is one of the retailers that has had to ramp up operations on e-commerce in a bid to address changing consumer shopping patterns.
Dividends Plans
Kohl’s was up by more than 10% as investors reacted to Q3 revenues coming in at $4 billion against $3.9 billion expected by Wall Street. The retailer turned in a profit of $2 million or $0.01 a share, against a 0.43 share net loss expected.
Year to date, Kohl’s has generated $910 million in operating cash flow. The strong cash flow has allowed the retailer to pay down its revolver and still remain with $1.9 billion in cash on hand. With the revolver fully paid, the retailer is well-positioned to resume its dividend program given the massive cash on hand. The last quarterly dividend came in February pegged at 0.70 a share.
