Kohl's stock soars after earnings report

Kohl's shares soared Thursday morning after the big-box retailer beat estimates for second-quarter revenue and profit.

The chain's stock (KSS) surged 10% in pre-market trading to $41.83 after the company posted a 7.7% increase in net income to $140 million and a 16.7% increase in earnings per-share to 77 cents in the period ended July 30.

Traders were heartened despite the company's 2% drop in revenue to $4.2 billion for the quarter. The company had 1,150 Kohl's stores at the end of the period, down from 1,164 a year ago.

The stock boost came despite Kohl's CEO Kevin Mansell describing the revenue performance in a statement as "below our expectations." The company also lowered its 2016 fiscal-year earnings outlook from a previous range of $4.05 to $4.25 per share to a new range of $3.80 to $4.

The second-quarter profit of 77 cents per share beat S&P Global Market Intelligence analyst estimates of 66 cents per share.

Mansell said the company's juniors and young men's departments posted encouraging results and that the company bolstered its gross margin from 38.9% to 39.5% in part through "inventory management initiatives."

"Our associates throughout the organization continue to effectively manage expenses in response to changing sales trends and I appreciate all of their efforts," he said.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.