Kohl's expects more sales gains, starts dividend

NEW YORK | Thu Feb 24, 2011 - Kohl's Corp (KSS.N) forecast sales and profit growth this year following gains over the holiday season and the mid-tier department store operator declared its first dividend.

Kohl's expects comparable sales to rise between 2 percent and 4 percent in the current quarter and for the fiscal year ending next January.

But the company, known for giving cautious forecasts, expects earnings of 68 cents to 73 cents per share for the current quarter and between $4.05 and $4.25 for the full fiscal year.

Both forecasts are below the average Wall Street forecast of 72 cents and $4.35 respectively, according to Thomson Reuters I/B/E/S.

Chief Executive Kevin Mansell credited leaner inventories for boosting profit margins by reducing the need to slash prices on unsold merchandise. He added the company's efforts to land more exclusive lines, such as its clothing line with pop singer Britney Spears, have helped it win market shares.

Mansell said that his customers, who analysts say are more price conscious than those at Macy's Inc (M.N), will "remain very interested in value." Its most direct rival J.C. Penney Co Inc (JCP.N) reports on Friday.

Kohl's net profit rose 14.3 percent to $493 million, or $1.66 a share, in the fourth quarter ended January 29 from a year earlier. That was in line with Wall Street forecasts.

As previously disclosed, sales at stores open at least a year were up 4.3 percent over the holiday quarter. Net sales were up 6.2 percent at $6.04 billion.

Kohl's said its board had declared a quarterly dividend of 25 cents per share.

Kohl's operates 1.089 department stores and said will open about 40 new locations this year.

Shares edged down 10 cents in premarket trading from their close on Wednesday of $52.02.

(Reporting by Phil Wahba; Editing by Lisa Von Ahn and Derek Caney)