Kohl's Corp (NYSE: KSS) reported Q3 earnings on Thursday after the bell. I didn't like what I saw. I couldn't find anything in there that would make me think the stock is a buy at this time. Well, there were a couple good points, but they didn't sway me.

Net revenues were pretty much flat at $3.8 billion. The bottom line came in at $0.52 per diluted share. Last year at this time, Kohl's delivered $0.61 per diluted share in net income. That's a 15% drop, and that isn't good, even if earnings beat expectations by a penny.

So, we got a flat top line and a declining bottom line. Want some more bad news? This is probably the worst metric: same-store sales decreased well over 6% for the quarter. Plus, they declined 6% for the nine-month period. As can be seen, things are getting worse for Kohl's. Same-store sales are indeed a key measure of a retailer's strength, so even though management did well in terms of gross margin and operational cash flow (the latter took a big jump, moving up 175% due to changes in working capital relating to inventories), I can't find it within me to be even remotely bullish on this business.

Continue reading Don't buy Kohl's (KSS)

Don't buy Kohl's (KSS) originally appeared on BloggingStocks on Fri, 14 Nov 2008 08:45:00 EST. Please see our terms for use of feeds.