Kohl’s 1Q17 Earnings Call Notes

Kevin Mansell – Kohl’s Corp.

Notable improvement in March/April vs February

“Overall, while sales results for the quarter in total didn’t meet our expectations, there was notable improvement in the March/April combined period compared to the February period in both sales and in traffic. Sales in February were down high single digits and improved to down 1% in the March/April combined period. April sales and traffic metrics were both positive mid-single digits, and traffic metrics actually led sales during that month. ”

*Even Kohls is touting machine learning

“importantly, from a cost perspective, while we increased fulfillment levels from our stores, our overall fulfillment costs remain nearly constant as a percent of digital sales. Team was able to accomplish this by using machine learning to improve the algorithms that determine how to optimally fill orders with our network of stores and EFCs”

*April was exceptionally strong

“Anecdotally, I know there’s been a lot of discussion around things like late arrival of tax refunds and a little bit maybe of a holiday hangover and colder weather in February, so I’m sort of putting February to the side. And I think March/April is probably the way we’re considering our business trend. I mean, as we indicated in the call, Matt, April was exceptionally strong, and – but as you also know, it was positively impacted by an Easter shift as well.”

We’re all in on omnichannel

“we’re all in on being a meaningful omnichannel retailer. We have a massive brick-and-mortar presence. It’s uniquely positioned as an apparel store in freestanding and strip centers across the country, which gives us unbelievable flexibility and amazing convenience to our core customer. And as such, our challenge is, of course, on the product side, to make the product offering in those stores more relevant and more effective, and then to leverage, as an omnichannel retailer, those store assets, our people, our inventory, our physical facilities, for customers who prefer to buy online.”

NOTE From JC Penney Call

Marvin R. Ellison – J. C. Penney Co., Inc.

We remain committed to omnichannel

“And third, we remain committed to becoming a world-class omnichannel retailer. We continue to see significant increase in our online SKU growth, and we plan to continue the SKU expansion throughout 2017.”