Jefferies Reiterates Buy on Kohl's Corp. (KSS) Following 2Q and Macy's Announced Closures
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Jefferies reiterated a Buy rating on Kohl's (NYSE: KSS), and raised the price target to $51.00 (from $47.00), following the company's 2Q earnings report and Macy's closure announcements. Macy's announced plans to close about 100 stores. This could have a positive effect on KSS comp store sales. In the last round of closures, KSS picked up about $500K in annual sales per closed Macy’s store. Kohl’s updated FY17 guidance to a new range of $3.80-$4.00 down from $4.05-$4.25 (Street was already at the low end of the new range).
Analyst Daniel Binder commented, "Q2 saw a nice acceleration in units per transaction, suggesting newer product is resonating with customers. Now we need to see the traffic improvements, which could follow. New guidance for FY17 rebases to recent sales trends with reasonable GM% and SG&A assumptions. Macy’s announced 100 store closures for early 2017 which could benefit neighboring KSS stores. It may even open up vendor opportunities for those seeking more doors."
Shares of Kohl's closed at $44.19 yesterday.
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