Kohl’s Corp. reported “high single-digit” online sales growth for the first quarter ending May 4, said CEO Michelle Gass in a call transcribed by Seeking Alpha. Total revenue was down 2.9% year over year to $4.09 billion, but exact web sales were not disclosed. Kohl’s is No. 24 in the Internet Retailer 2019 Top 1000.
“Mobile again represented the majority of our traffic growth at over 75% of digital traffic and more than half of digital sales,” Gass said.
However, digital sales ate into the retailer’s overall margins, as a higher penetration of digital sales resulted in increased shipping costs, Gass said.
Kohl’s expects a deal with Fanatics that it announced on Monday, which will expand its online assortment of sports gear, will help bolster its ecommerce sales in the latter half of the year.
It also expects the expansion of its Amazon returns program will help it grow overall sales. Kohl’s will accept returns from Amazon starting in July, which it expects will drive “an incremental lift in sales,” Gass said. She called it the “single-biggest initiative of the year.”
However, the increased logistics costs of the Amazon program, along with increase store labor needs, led Kohl’s to increase expense forecasts from 1.5% to 2.5%. Kohl’s expects the sales increase from returners shopping in stores to balance that out, keeping sales growth in line with the added expenses.
In other earnings news:
- Home improvement chain Home Depot Inc. (No. 7) grew online sales 23% year over year for the quarter ending May 5. Exact figures were not disclosed. 54% of online orders were picked up in stores, said CEO Craig Menear in a call transcribed by Seeking Alpha. That’s up from 50% of orders in the last quarter.
- Retail chain J.C. Penney Co. Inc. (No. 40) reduced the number of drop-shipped items it offered through its ecommerce site in the first quarter. “We removed hundreds of thousands of unproductive and unprofitable factory-shipped SKUs from our website with almost no impact to our online sales results,” CEO Jill Soltau said in an earnings call transcribed by Seeking Alpha. The retailer did not disclose quarterly web sales, but its overall sales sank 5.6% year over year to $2.4 billion for the quarter ending May 4.
- Apparel retailer Urban Outfitters Inc. (No. 46) announced double-digit ecommerce sales growth for the first quarter ended April 30, but it didn’t disclose exact figures. That growth helped drive overall retail sales up 1% to $782.6 million. Expenses were up due to increased delivery and logistics costs associated with increased digital penetration.
- Direct-to-consumer luggage brand Away (No. 474) raised $100 million in a Series D funding round led by Wellington Management Company LLP. It has raised $156 million so far, Away says, and is now valued at $1.4 billion. With the latest round of funding, the smart luggage maker it will expand its product line and grow its footprint of physical stores.