The company’s selling, general & administrative (SG&A) expenses increased 1.6 per cent year-over-year, to $1.3 billion in the second quarter of 2023. As a percentage of total revenue, SG&A expenses were 33.5 per cent, an increase of 208 basis points year-over-year.

In the second quarter of fiscal 2023, the operating income was $163 million compared to $266 million in the prior year. As a percentage of total revenue, operating income was 4.2 per cent, a decrease of 233 basis points year-over-year. The company’s net income was $58 million, or $0.52 per diluted share. This compared to net income of $143 million, or $1.11 per diluted share in the prior year, the company said in a press release.

“Our second quarter earnings were in line with our expectations. We maintained strong sales momentum in Sephora at Kohl’s, reduced inventory by 14 per cent, and managed expenses tightly. Further, solid cash flow generation allowed us to reduce our borrowings in the period,” Tom Kingsbury, Kohl’s chief executive officer, said.

“Many of our strategic efforts are just underway, which we expect will contribute incrementally in the back half of the year, and even more so in 2024 and beyond. We have enhanced the store experience and recently opened an additional 200 Sephora at Kohl’s shops, and are taking steps to further optimise our assortment and simplify our value strategies. Looking ahead, we are reaffirming our 2023 guidance and remain confident in our longer-term opportunity. I want to thank the entire Kohl’s team for their efforts to support and drive improved Kohl’s performance,” Kingsbury continued.

For the full year 2023, the company has reaffirmed its financial outlook and currently expects a decrease of 2-4 per cent in net sales, which includes the impact of the 53^rd week which is worth approximately 1 per cent year-over-year. The operating margin is likely to be approximately 4 per cent.

Fibre2Fashion News Desk (RR)