Kohl's profits plunge, forecasting holiday sales spike

Kohl's is one of many retailers facing earnings troubles, and are driving prices lower for the holidays to compete for the attention of holiday shoppers.
Posted By Sonali Basak  |  Nov. 14, 2013 at 2:05 PM
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Nov. 14 (UPI) -- Kohl's profits fell 18 percent, and analysts say holiday retail discounts might spike after also seeing disappointing results also from Walmart stores Thursday.

This comes after Macy's surprised Wall Street Wednesday with stronger-than-expected earnings, so retail might not be as strong as Macy's earnings indicated. All three stores -- Wal-Mart, Kohl's and Macy's -- have announced opening for Black Friday sales earlier on Thursday.

Wells Fargo reports that some of Macy's success came at Kohl's expense. But Kohl's also mirrors the customer base of brands such as Walmart and JCPenney, which releases earnings next week.

Walmart, which also announced earnings Thursday, also showed lower-than-expected earnings, foreshadowing greater holiday sales to draw in more consumers, who are less likely to spend with an increase in Social Security taxes and uncertainty in Washington.

Retailers are in a sales war going into the holiday season, which could bring in almost 40 percent of sales for the year, the National Retail Federation reported. Earnings foreshadow continual holiday price drops in Walmart and Kohl's. And Kohl's CEO Kevin Mansell said the company is prepared for the season "from a merchandise content and inventory perspective," and has ramped up marketing.

Profits fell 18 percent to 177 million, or 81 cents per share, down from $215 million in the year-ago period. Sales fell 1 percent to $4.44 billion, and share prices fell more than 7 percent Thursday.

[Wall St. Cheat Sheet] [Business Insider] [MarketWatch]

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