By Dhirendra Tripathi

Investing.com – Kohls stock (NYSE:) traded 3% higher in premarket trading on Tuesday after the retailer’s 2022 guidance came in ahead of estimates amid signs its efforts to attract a younger audience are gaining traction.

The company’s successful handling of shortages in its supply chain led to higher margins for the fourth quarter. Shoppers were attracted to established brands, such as Tommy Hilfiger or Calvin Klein, along with popular labels like Sephora and Cole Haan.

“In 2021, we delivered all-time record earnings per share, significantly ahead of our expectations. Our operating margin of 8.6% exceeded our 2023 goal two years ahead of plan, a direct result of our efforts to restructure the business to be more profitable,” CEO Michelle Gass said in a statement.

The company kept up with its plan to roll out 850 ‘Sephora at Kohl’s’ stores by 2023, an attempt to position the company as a beauty destination. These stores offer a wide range of high-end makeup, skin care, and fragrance products.

According to Reuters the company made lower promotional offers and limited the private label brand strength to protect profits against the soaring freight costs during the quarter.

While the company doubles its annual dividend, it also proposes to buy back shares valued up to $2 billion. These include a $1B exercise for 2022. $500M could be accelerated in the second trimester.

Kohl’s expects adjusted profit per share of $7 to $7.50 in the year while revenue is seen growing 2% to 3%. Kohl’s posted an adjusted profit per share (EPS) of $7.33 in its most recent financial year on revenues of more than $19 million.

Total revenue for the fourth quarter rose by about 6%, to $6.5 billion. The adjusted EPS decreased by 2 cents, to $2.20.