Executive Summary

• Kohl’s reported adjusted 1Q16 EPS of $0.31 versus the consensus estimate of $0.37.
• Total revenues were $3.97 billion, below consensus of $4.13 billion. Comps declined by 3.9%, below consensus of a 0.2% increase. Management noted that sales in the quarter were challenging. Transactions per store, a proxy for traffic, were down 4.1% in the period. Management also commented that apparel was an area of weakness, as consumers are “not buying apparel.”
• While management did not update its full-year guidance, it commented that it plans to focus on same-store sales and SG&A.