Kohl's Stock Rockets After Earnings: Sephora Brings 'New Younger' Shoppers, CEO Says

Kohl's Corp. (NYSE:KSS) shares were soaring Wednesday after the company reported better-than-expecting Q2 earnings and raised its fiscal year revenue outlook. 

Interim CEO Michael Bender gave more color on the company's earnings call with analysts. 

• KSS stock is climbing. See the real-time chart here. 

Bender highlighted the completion of the Sephora at Kohl's expansion, which included an additional 105 small format shops in Q2.

Sephora at Kohl's has delivered new customers, he says. The company is on track towards its goal of a $2 billion beauty business. 

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"The partnership continues to draw a new younger customer with over one third of Sephora shoppers who are also exploring other areas of the store, most notably juniors and women's which remain the top cross shopped categories," Bender said. 

Bender also spoke to some weakness appearing in the consumer, most notably in lower to middle-income consumers. 

"These lower to middle income customers continue to prioritize value and are trading down into lower opening price point products. Several of our key initiatives are focused on delivering greater value to these customers through investing in our proprietary brands and adding more coupon eligible brands," Bender explained. 

Kohl's proprietary brands benefit from both the pressured consumers focused on value as well as the company's bottom line, he says.

"For every 100 basis points of penetration we gain in proprietary brands, it’s 10 to 15 basis points of improvement to our gross margin line. So it’s definitely a key driver," Bender said. 

Although Kohl's raised its fiscal-year revenue outlook, the CEO explained that the guidance remains conservative due to the fragile state of the company's core consumers. 

"So we’re going to have to fight for every dollar in the back half," Bender cautioned. 

KSS Stock Price: According to data from Benzinga Pro, Kohl's stock was up 17.14% at $15.28 at the time of publication Wednesday. 

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