Kohl's reported disappointing quarterly sales. It said sales sped up in March and April, but investors weren't impressed. Fred Katayama reports.
A tough winter for Kohl's. Sales at the department store chain grew much slower than expected in the latest quarter. Store traffic was flat, and the company said the West Coast port strike delayed shipments for some product categories. The port strike and wicked winter weather have dogged other retailers like Macy's. Kohl's slow sales growth comes as a surprise. Analysts were expecting it to fare relatively better than its rivals with its new initiatives launched last year. Kohl's has been giving its beauty business a facelift by renovating its beauty counters and adding brands like Bliss. And analysts say its new fast-growing loyalty program has enticed members to visit more and spend more at its stores. UBS analyst Michael Binetti said, "The burden is on Kohl's to explain how the myriad of initiatives laid out at the October 2014 analyst day will reaccelerate to support annual guidance." Kohl's CEO Kevin Mansell said sales accelerated in the back half of the quarter after a weak February. And its higher profit beat expectations. But that didn't appease investors. The stock, whose 22 percent rise this year has far outperformed its peers, dropped in early trading. The lackluster results from Kohl's and Macy's are yet another sign that the economy is struggling to rebound strongly from the first quarter. U.S. retail sales were flat last month. Investors will get a look at how wealthier customers have fared when upscale department store chain Nordstrom reports earnings after the bell.