Kohl's spikes on surprise profit, turnaround kicks in
STORY: The turnaround efforts at Kohl’s appear to be yielding results.
The department store chain on Wednesday posted a surprise quarterly profit and maintained its full-year targets.
New CEO Tom Kingsbury took the helm in February with the aim of reducing excess inventory and slashing costs.
That resulted in a more than one billion-dollar drop in operating expenses in the first-quarter, while gross margins grew and inventory fell by 6%.
Last year, Kohl's shares lost half their value as the company faced shareholder unrest due to disappointing sales and failed negotiations for a sale of the company.
Challenges remain, as Wednesday’s earnings showed a bigger-than-expected drop in Kohl’s comparable store sales, due in part to a challenging retail environment.
Several retailers, including Target and Home Depot, have issued conservative forecasts as inflation-weary customers curb spending on non-essential items.
Shares of Kohl’s spiked in Wednesday morning trading.