Kohl's (KSS) couldn't win on Tuesday morning, as selling picked up on good news the same as it would have on bad in the current environment.
Shares of the Menomonee Falls, Wisconsin-based retailer fell precipitously in pre-market trading despite top and bottom-line beats for its fiscal third quarter ended Nov. 3.
The retailer reported $0.98 in earnings per share, beating estimates by $0.03, and revenue of $4.63 billion, besting estimates by $260 million. The company, an Action Alerts PLUS holding, also reported a 2.5% increase in same-store sales, 1% above expectations, and expansion of its gross margin by 25 basis points.
"We are very pleased that our strong performance continued into the third quarter, resulting in a comparable sales increase of 2.5%, our fifth consecutive quarter of positive growth," CEO Michelle Gass said in a statement. "We experienced strength across our entire apparel business, and our focus on speed to market and inventory management are driving relevancy with our customers, resulting in sales growth, margin expansion, and clean inventory levels."
The market seems more inclined to dump the shares, however, sending the stock spiraling in early Tuesday morning trading.
To be sure, it was not all roses from the retailer as a meager guidance raise might have helped dampen market enthusiasm amid weak guidance from competing retailers such as Target (TGT) and Nordstrom (JWN) .
Kohl's fiscal year 2018 diluted earnings per share is expected to be $5.35 to $5.55, compared to prior guidance of $5.15 to $5.55, not offering much upside to a market hungry for a booming retail holiday.
Still, Gass remained confident heading into the holiday season.
"We are executing extremely well in our stores and our digital channels, and our efforts across the company have us well-positioned going into the fourth quarter," she said.
Gass will look to communicate that confidence to a skeptical market in an earnings call scheduled for 9:00 a.m. ET.
The shares are down nearly 9% in pre-market trading heading into the call.