If You Can’t Beat Amazon, Partner With Amazon
Kohl's Corp. reported their earnings yesterday. Kohl's earned $161 million, or 98 cents a share mainly due to the tax cuts. Last year, Kohl's earned $117 million, or 70 cents a share, in the comparable period and saw its fifth consecutive quarter of rising sales at established stores thanks to increased foot traffic as a result of 250 plus stores of Bon-Ton closing earlier this year. As you can see Kohl’s benefited from external factors, not organic growth. So Kohl’s decided to pursue another strategy, much different than Target, they partnered with Amazon.
Last year, in 10 stores in the Chicago and Los Angeles metro areas, it opened Amazon smart-home boutiques. During that same time, 82 Kohl's stores in the same area began accepting returns for Amazon. Kohl's now accepts Amazon returns at 100 stores and has Amazon shops in 30 stores where they sell Amazon products such as the Echo smart speakers over the holiday season.
The partnership simplifying the returns process for Amazon and showcasing Echo devices and other Alexa-compatible hardware and in return brings in addition foot traffic into the Kohl’s stores. Case in point, the partnership was even able to gain traction with millennials, who otherwise would have ignored Kohl’s.
Kohl’s raised their guidance for the year, but the stock price sold off yesterday. Does Wall Street know something we don’t, lets go to the charts to find out?
For nearly 20 years, price has been range bound on the monthly chart...WOW.
On the weekly chart, price broke the weekly up trendline and based on the RSI was showed divergence.
The daily chart suggests to short price at $73.50 with a first target at $57.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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by rollandthomas
