Kohl's Posts Powerful Gains

By Staff -- Home Textiles Today, 3/12/2007 12:00:00 AM

Menomonee Falls, Wis. —

Fueled by rising sales, beefed up margins and tighter inventory controls, fourth-quarter profits at Kohl's Corp. soared up 29.3%, to $484.6 million from $374.9 million during the all-important Christmas quarter.

Sales jumped 16.7%, to $5.4 billion from $4.7 billion, boosted by new store openings. Same-store sales climbed 4.1% during the quarter, up 5.9% for the year.

Driving the profit growth, in addition to rising sales, the retailer strengthened average gross margin by 140 basis points, or 1.4 percentage points, to 35.3% from 33.9% during the same period a year ago. Costs were held in check, rising as a percentage of sales by just 30 basis points, or three-tenths of a percentage point, to 18.9% from 18.6%.

Under careful control, inventories grew slower than sales, rising 15.7%, vs. the 16.7% sales growth.

In another lift to the bottom line, the retailer slashed its interest costs by 46.8% during the quarter, to $10.0 million from $18.8 million a year ago, generating a cash savings of $8.8 million. Full-year savings totaled $30.4 million.

Kohl's Corp.