Kohl’s has 14% drop in income

Kohl’s Corp. reported a 14% drop in third-quarter net income and lowered its profit expectations for the year.

The Menomonee Falls, Minn.-based retailer said it earned $194 million, or 61 cents a share, compared with $224.5 million, or 68 cents, a year earlier. Sales increased 5% to $3.83 billion.

The earnings per share beat the expectations of analysts, who on average had predicted Kohl’s would earn 60 cents a share, according to a survey by Thomson Financial. But the company failed to meet analysts’ expectations of nearly $3.9 billion in sales.

Same-store sales, or sales at stores open at least a year, were down 2.6% in the quarter, the company said.

Kohl’s lowered its earnings expectations for the fourth quarter to a range of $1.45 to $1.51 a share, assuming same-store sales fall as much as 2%. The company also lowered its full-year guidance for earnings per share to a range of $3.52 to $3.58, down from $3.77 to $3.87.

David Heupel, portfolio manager for Thrivent Investment Management Inc. in Minneapolis, said he was not surprised that the company lowered its outlook. He said Kohl’s had been adding brands, such as a line by high-end designer Vera Wang, and trying to expand offerings to customers, but that could not counteract rising energy prices, falling home prices and the slumping economy.

Kohl’s reported its earnings results after markets closed. Shares of Kohl’s fell 46 cents to close at $48.92, then fell $1.32 in after-hours trading.