01:08 PM EDT, 03/12/2024 (MT Newswires) -- Kohl's (KSS) reported a bigger-than-expected decline in fourth-quarter revenue on Tuesday while guiding flat sales at the midpoint and a decrease in per-share earnings for the ongoing year.

Revenue fell to $5.71 billion for the three months ended Feb. 3 from $5.78 billion the year earlier and missed the $5.77 billion average analyst estimate on Capital IQ. Comparable sales fell 4.3%, worse than the 3.2% decline projected by analysts. Earnings per share climbed to $1.67 from a year-earlier loss of $2.49 and beat the Street's view of $1.28.

November was the weakest month in the quarter due in part to warmer weather, while December comparable sales were flat and January's slid as the company lapped elevated clearance activity from the prior year, Chief Executive Tom Kingsbury told analysts on a conference call, according to a Capital IQ transcript. Shares of Kohl's fell 4.7% in midday trade.

"However, January was better than our plan," he said. "Another positive was that we drove increased regular price sales in December and January through the delivery of transitional goods."

For 2024, the retailer expects sales to be flat at the midpoint, ranging between falling or rising by 1% over 2023's sales of $16.59 billion. The consensus is for revenue of $16.72 billion in the ongoing year. "We are incredibly focused on driving growth," Kingsbury said on the call.

Sephora at Kohl's will increase to more than 10% of total company sales in 2024, Kingsbury said. In 2023, Sephora at Kohl's generated more than $1.4 billion in sales, a year-over-year increase greater than 90%. 2023 was a "breakout year" for the Sephora partnership, he said.

Kohl's sees comparable sales in the flat to up 2% range this year, implying an acceleration from the decline of 4.7% it reported for 2023. It is guiding for EPS between $2.10 and $2.70, signaling a year-over-year decrease from last year's $2.85.

"We expect strong inventory management to drive further gross margin expansion in 2024," Kingsbury said. "And we plan to continue to benefit from disciplined expense management."

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