Kohl’s Corp. (KSS) reported strong third quarter 2009 results with net income of $193 million or 63 cents per share compared to $160 million or 52 cents per share in the year-earlier quarter. The earnings exceeded the Zacks Consensus Estimate by about 2 cents.

The better-than-expected third quarter results were primarily due to positive comparable sales increase through effective brand strategies and prudent inventory management measures. In addition, Kohl’s also reported increased penetration in “Only at Kohl’s” brands, which resulted in increased cash flow and improved gross margins.

Total revenue during the quarter increased 6.5% year-over-year to $4.1 billion, while comparable sales increased 2.4%. Gross margin increased to $1.5 billion during the quarter from $1.4 billion in the year-ago period. Cash flow from operating activities increased 64% during the quarter to $1.4 billion, primarily due to efficient working capital management.

During the first nine months of 2009, Kohl’s had opened 56 new stores. At quarter end, the company had 1,059 stores in 49 states in the U.S. compared to 1,004 stores in 48 states in the year-earlier quarter. In addition, the company completed remodeling in 51 stores during the period versus 36 stores in the previous year.

Kohl’s expects its strong performance to continue in the fourth quarter as well, with total sales expected to increase 3% to 6% year-over-year. Fourth quarter earnings are anticipated in the range of $1.14 to $1.24 per share, while fiscal 2009 earnings are expected in the range of $2.98 to $3.08 per share.

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