The Franchise Group has emerged as the front-runner to possibly acquire Kohl’s.
News of the arrangement with The Franchise Group on Thursday triggered a 13.5 percent or $5.68 jump in Kohl’s shares in after-hours trading to $47.80. Kohl’s shares had been down somewhat recently, in the low $40 range, following a disappointing first-quarter financial report.
When the stock price was higher, it was believed that Kohl’s was seeking offers close to $70 a share. The Franchise Group is a platform for operating franchise retail operations. The company’s portfolio includes Pet Supplies Plus, American Freight, Buddy’s Home Furnishings, Sylvan Learning, Badcock Home Furniture, Wag N Wash, as well as The Vitamin Shoppe.
Upon reporting in May its first-quarter results, Kohl’s indicated that with its sales weakening, it decided to lower expectations for sales and earnings in 2022, so net sales are now expected to be flat to 1 percent ahead as compared to the prior year. The operating margin is now expected to be in the range of 7 to 7.2 percent, and earnings per share are expected to be in the range of $6.45 to $6.85, excluding any non-recurring charges.
The company said it expects improvement in the back half, and remains committed to its long-term strategy, which is focused on rolling out Sephora shops inside its stores and continuing to build its appeal as a destination for casual and active apparel for the family, and for strong values. The $19.4 billion Menomonee Falls, Wisc.-based retailer anticipates tailwinds as recently implemented strategies take hold.
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