Deborah Mary Sophia

(Reuters). -The U.S. department store chain Kohl’s Corp. (NYSE:), predicted higher than expected 2022 sales numbers and profits Tuesday due to faster shipments, and the introduction customer-favorite brands like Calvin Klein or Tommy Hilfiger.

Positive earnings by Macy’s Inc, a rival company (NYSE:), also signal optimism in the sector. This is after a hard 2021 that saw sales suffer from supply chain problems and the COVID-19 Crisis.

Pre-market trading saw Kohl’s share price rise 4% as the company announced a $3Billion share buyback, and increased its dividend by doubling after exceeding holiday quarter profit expectations.

To protect profits from skyrocketing freight costs, the apparel, jewelry, and fragrances retailer has reduced promotions. It has more than 1,100 U.S. stores.

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To attract more customers, it has opened Sephora shops at its outlet stores and introduced popular brands such as Cole Haan or Eddie Bauer.

These moves increased its gross margin from 32% last year to 33.2% during the third quarter.

The company expects net sales growth of 2% to 3.3% for fiscal 2022. However, analysts expected an average increase in revenue of 2.2% according to IBES data by Refinitiv.

According to analysts, earnings per share are expected to range from $7.00- $7.50 without items, as opposed with $6.55 analyst expectations.

It fell short of expectations in the holiday quarter due to shortages and a rebound in coronavirus infections. Customers were encouraged to move forward with Christmas shopping by early discounts.

Kohl’s in Menomonee Falls (Wisconsin) has come under increasing investor pressure to either sell itself or spin off its online business.