Executive Summary

• In 1Q18,Kohl’s reported total revenues of $4.21 billion, up 3.5% year over year. Adjusted EPS was $0.64, beating the $0.50 consensus estimate and up from $0.39 in the year-ago quarter. Comp sales were up 3.6% from the year-ago quarter.
• Reported operating profit of $210.0 million exceeded the consensus estimate of $178.9 million. Margin performance was driven by a clean inventory position, localization of inventory management and speed initiatives that resulted in improved operational agility and a decrease in permanent and promotional markdowns.
• Management raised its guidance for FY18 and now expects adjusted EPS of $5.05–$5.50, versus $4.95–$5.45 previously.