Cheer Up Investors, Inconsistency Is Kohl's (KSS) Calling Card

November 30, 2012 8:43 AM EST
Get Alerts KSS Hot Sheet
Price: $41.38 --0%

Rating Summary:
    8 Buy, 14 Hold, 5 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 10 | Down: 16 | New: 54
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Yesterday investors took Kohl's Corp. (NYSE: KSS) to the woodshed after the retailer reported a surprise drop in same store sales, which came in at -5.6 percent vs. a 2.1 percent increase expected.

Commenting on developments, analyst Daniel Binder said "With shares down sharply, one might say the horse is out of the barn, so we are leaving our options open for some recovery, if December bounces back. Given the sharp move in SSS from beginning to end of month, there may still be hope of a positive comp in December."

While the impact of Hurricane Sandy was an expected drag, Binder said weakness in the first two weeks was not limited to storm affected areas.

"While the company is not providing much detail on the shortfall related to Sandy, we think it had about a 2% impact. A greater than expected channel shift to online at the end of the month pushed some sales into December and we think this was worth about 70 bps," said the analyst.

Kohl's did not open early on Thanksgiving and this may have cost the company market share to Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). It also experienced technical glitches at related to heavy traffic on Thanksgiving and Cyber Monday.

If there is silver lining in Kohl's weak comps report it is that, in the words of Binder, "consistency in results has not been a strong point". Ok, maybe that isn't a silver lining per se, but it leaves the door up for a swing in the other direction, right? Maybe?

Jefferies has a Buy rating on Kohl's (NYSE: KSS) with a revised price target of $54.00 (from $59.00).

For an analyst ratings summary and ratings history on Kohl's click here. For more ratings news on Kohl's click here.

Shares of Kohl's closed at $45.02 yesterday.

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