Today, shares of clothing retailer Kohl’s (NYSE:KSS) were up as much as 9.4% at 10:49 a.m. ET. At 3:30 p.m. ET, it was still up nearly 5% at $29.80.
At 3:30 p.m. ET on Friday, all three major indices were down even though the market had opened higher on the back of a strong jobs report. However, the company benefited from an additional factor that pushed the stock price in the right direction.
What’s the Reason?
According to the Labor Department’s data released Friday morning, the economy added roughly 315,000 jobs, which was aligned with projections. Amid the day, Russia’s state-owned oil company Gazprom said it had stopped gas shipments into Germany via its Nord Stream 1 pipeline owing to equipment concerns, effectively erasing the earlier good news.
Even yet, the positive news for Kohl’s (NYSE:KSS) was not overshadowed on Friday when it was reported by many news outlets that Oak Street Real Estate Capital had made an offer to purchase $2 billion worth of the company’s stores, with the company leasing them back from the private equity group.
As reported, this transaction will take place just over a month after a sale to retail holding business Franchise Group fell through.
Like many other stores this year, Kohl’s (NYSE:KSS) has felt inflation’s effects on its bottom line. As of September 2nd, the stock price had dropped by about 39% due to this news. The Federal Reserve hopes to rein in inflation by increasing interest rates, but this may have the unintended consequence of slowing the economy and reducing consumer spending on non-essential items.
It’s a solid short-term strategy for Kohl’s (NYSE:KSS) to monetize its real estate by striking a deal with Oak Street, but the company will still need to lease back the stores. We won’t know if the deal goes through, but if it does, it might increase liquidity and funds to invest in the company’s future growth.
While the near-term outlook isn’t great for Kohl’s (NYSE:KSS), the stock trades at a bargain 5 times earnings.
Featured Image: Megapixl © Sakkawokkie