Q3 Earnings Roundup: Kohl's (NYSE:KSS) And The Rest Of The General Merchandise Retail Segment

Let’s dig into the relative performance of Kohl's (NYSE:KSS) and its peers as we unravel the now-completed Q3 general merchandise retail earnings season.

General merchandise retailers–also called broadline retailers–know you’re busy and don’t want to drive around wasting time and gas, so they offer a one-stop shop. Convenience is the name of the game, so these stores may sell clothing in one section, toys in another, and home decor in a third. This concept has evolved over time from department stores to more niche concepts targeting bargain hunters or young adults, and e-commerce has forced these retailers to be extra sharp in their value propositions to consumers, whether that’s unique product or competitive prices.

The 8 general merchandise retail stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.8% below.

Luckily, general merchandise retail stocks have performed well with share prices up 12.5% on average since the latest earnings results.

Kohl's (NYSE:KSS)

Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE:KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.

Kohl's reported revenues of $3.58 billion, down 3.6% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ gross margin estimates.

Michael J. Bender, Kohl’s Chief Executive Officer, said, “We are pleased with Kohl’s third quarter results, marking a third consecutive quarter of delivering top-line and bottom-line performance ahead of our expectations. These results are a direct reflection of the progress we are making against our 2025 initiatives, reinforcing our confidence as we continue to move in the right direction. We are focused on building on this momentum, as we remain committed to delivering quality products, great value, and a frictionless experience to our customers in an uncertain macroeconomic environment.”

Kohl's delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 48.4% since reporting and currently trades at $23.83.

Is now the time to buy Kohl's? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Dillard's (NYSE:DDS)

With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.

Dillard's reported revenues of $1.49 billion, up 2.7% year on year, outperforming analysts’ expectations by 3.1%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 20.4% since reporting. It currently trades at $729.17.

Is now the time to buy Dillard's? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Ollie's (NASDAQ:OLLI)

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ:OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Ollie's reported revenues of $613.6 million, up 18.6% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ EBITDA estimates but revenue in line with analysts’ estimates.

As expected, the stock is down 1.5% since the results and currently trades at $117.01.

Read our full analysis of Ollie’s results here.

Burlington (NYSE:BURL)

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Burlington reported revenues of $2.71 billion, up 7.1% year on year. This number was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

Burlington had the weakest performance against analyst estimates among its peers. The stock is down 5.1% since reporting and currently trades at $270.

Read our full, actionable report on Burlington here, it’s free for active Edge members.

TJX (NYSE:TJX)

Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE:TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.

TJX reported revenues of $15.12 billion, up 7.5% year on year. This print surpassed analysts’ expectations by 1.5%. It was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.

The stock is up 7% since reporting and currently trades at $155.73.

Read our full, actionable report on TJX here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.