Kohl’s Inc.’s second quarter earnings report this week provided more evidence that online sales are sizzling even as bricks-and-mortar sales are lukewarm at best.
The apparel retail chain reported that e-commerce sales increased 28% in its fiscal second quarter while comparable-store sales increased only 0.9%. That followed Wal-Mart Stores Inc.’s report this week that e-commerce grew 30% even as total sales came in short of expectations, and the U.S. Commerce Department reporting an 18.4% increase in online retail sales in Q2, the strongest year-over-year growth rate since late 2007.
Kohl’s is No. 26 in the 2013 Internet Retailer Top 500, while Wal-Mart is No. 4.
Kohl’s did not provide a dollar value for its second quarter e-commerce sales. But the retailer said last year when it reported second quarter sales that e-commerce totaled $237 million; a 28% year-over-year increase would put Q2 2013 online sales at around $303 million. In its first quarter earnings report, Kohl’s reported that online sales increased 31.1% to $329 million. The retailer did not respond to a query about why it did not report online sales in dollars for the second quarter of 2013.
Web sales have been growing steadily for Kohl’s in recent years. The company reported in February that 2012 online sales totaled $1.43 billion, a 43% increase from the year before.
In discussing results of the second quarter of 2013, CEO Kevin Mansell noted that online sales growth suffered an expected dip in Q2 as the retailer completed a transition to a new e-commerce platform from Oracle Corp. Kohl’s previously had reported plans to switch to Oracle from RedPrairie technology from JDA Software Group Inc.
In addition to moving to a new e-commerce platform, Kohl’s is also taking several other steps to make it easier for consumers to shop both in its stores and online, Mansell said. That includes having about 200 of its 1,155 stores start fulfilling online orders in the fall and introducing in-store pickup of online orders next year. He said Kohl’s already has kiosks in stores that customers can use to order merchandise not in stock, and those kiosks account for 10% of online orders. He says 95% of returns of web orders go to Kohl’s stores. “We’re committed to meeting the changing needs of our customers and strengthening our omnichannel experience,” he told analysts yesterday.
For its fiscal second quarter, which ended Aug. 3, Kohl’s also reported:
- Total sales increased 2.0% to $4.289 billion from $4.205 billion in the same period a year ago.
- Comparable-store sales increased 0.9%.
- Net income decreased 4% to $231 million from $240 million.
For the first half of its fiscal year, Kohl’s reported:
- Total sales of $8.488 billion, an increase of 0.5% from $8.447 billion during the first half of last year.
- Comparable-store sales fell 0.5%.
- Net income of $378 million, down 4% from $394 million.
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