Rather a lot more beauty, more “dressed” up casual apparel and more gifts and pets.

Those are a few of the key components of Kohl’s Corp.’s turnaround strategy, which to this point is showing some progress in stabilizing the business because the retailer reported that its bottom line stayed flat for the primary quarter while sales volume continued to slip.

Net income for the quarter ended April 29 was $14 million, or $0.13 per share. That in comparison with net income of $14 million, or $0.11 per share within the prior 12 months.

Net sales decreased 3.3 percent to $3.36 billion, from $3.47 billion. Comparable sales decreased 4.3 percent.

“Our first-quarter results were in keeping with our expectations and represented a primary step as we work to drive sales and earnings performance over the long run,” Tom Kingsbury, Kohl’s chief executive officer, said Wednesday in an announcement. “We delivered margin expansion, in addition to a 6 percent reduction in inventory. As well as, our stores business achieved productivity gains and Sephora at Kohl’s continued its sales momentum.”

Kingsbury added that the corporate is “making progress against each of our key 2023 priorities, enhancing our customer experience, simplifying our worth strategies, managing inventory and expenses with discipline and strengthening our balance sheet. I would really like to thank the whole Kohl’s team for driving against these priorities with a transparent focus and robust determination. While there continues to be work to be done and the macroeconomic environment stays difficult, we’re affirming our 2023 guidance and proceed to have conviction in Kohl’s’ longer-term opportunity.”

Apparently, investors were pleased with the first-quarter report card, pushing the stock price up 7.45 percent, or $1.45, to shut at $20.72. Earlier within the day, the stock surged greater than 12 percent.

In other financial results, Kohl’s reported that its gross margin increased 67 basis points, and that inventory declined 6 percent.

The Menomonee Falls, Wisconsin-based retailer affirmed its full-year outlook, expecting a sales decrease of two to 4 percent, which incorporates the impact of the 53rd week which is price about 1 percent year-over-year. Sales in 2022 got here to $17.2 billion.

Operating margin is seen at about 4 percent. Diluted earnings per share are Within the range of $2.10 to $2.70, excluding any non-recurring charges.

Capital expenditures are seen within the range of $600 million to $650 million, including expansion of its Sephora partnership and store refresh activity.

Kingsbury, in a conference call, said beauty sales increased 150 percent year-over-year. “We achieved mid-teens comparable beauty sales growth within the 200 Sephora shops opened in 2021 and the sales trends within the 400 shops open in 2022 proceed to exceed our plan.” He said investments in Sephora “are yielding the outcomes we intended. We’re within the technique of further expanding the Sephora footprint at Kohl’s, reaching greater than 900 of our stores by the top of 2023.” 

He said Kohl’s developed a 750-square-foot Sephora shop, and five opened a couple of months ago. “They’ve driven solid beauty sales exceeding our expectations. We’ll open one other 45 later this fall reaching 50 by the top of 2023 and might be rolled out to the rest of the chain by 2025.”

He said Kohl’s lively business was “healthier in the course of the period outperforming the corporate average with positive growth in apparel and continued success in outdoor.

“Conversely, we proceed to see softness in the house category, an area we’re highly focused on and one that continues to be a considerable long-term opportunity.” He said Kohl’s is “rebuilding our core business in addition to growing underrepresented categories similar to gifting, decor, pet, impulse and outdoor. We’ll see these initiatives come to life in how we merchandise our stores in the approaching months, with gifting and residential decor showcased near the front of the shop to encourage customers as they enter. While you visit our stores now, you’ll see Americana-themed gifting products focused across the Memorial Day and Fourth of July holidays.”

Specifically, Kingsbury said areas of opportunity include a greater number of wall art, seasonal items, patio furniture, camping and outdoor gear, and tabletop.

In apparel, Kohl’s is beefing up its number of “polished” casual and dressier clothing in women’s and in men’s, adding more suits and dress shirts. Meanwhile, Kohl’s “stays committed to the lively business while investing in our outdoor presence with an enhanced in-store experience and elevated merchandise,” Kingsbury said.

Regarding children’s, Kingsbury said the category outperformed the corporate average in the primary quarter with positive growth in lively and dress clothing. “Just like women’s and men’s, we’re diversifying our offerings with a greater selection in areas similar to girl’s dresses and boys dress clothing.”

In other maneuvers to enhance the shopping experience, Kohl’s is consolidating checkouts to 1 central checkout in most stores, adding self-checkout kiosks in 250 stores to support that transition, and simplifying its signage and graphics for higher navigation of the stores.

When it comes to store openings, there have been two this 12 months to this point and five more are planned, including one relocation. “We don’t anticipate closing many stores — few, if any,” Kingsbury said.

Kohl’s digital business saw softer demand in the primary quarter, as customers continued to shift back toward stores. Online-only promotions were reduced “as we work to simplify our worth strategies,” Kingsbury said.

Explaining how the worth messaging will change, Kingsbury said, “Throughout the first quarter, we began to interchange general promotion and online-only offers with targeted offers and clearance events to clear slower selling goods on a more regular basis. We’ll proceed this approach moving forward at the suitable pace. Moreover, we’ll test key value items inside our private apparel and residential brands that are aligned with our simplified pricing efforts. Customers will begin to see a small percentage of our assortment move to this approach in the course of the back-to-school season which we’ll integrate into our marketing messaging.”

Kingsbury also said the corporate is starting clearances earlier to create greater liquidity to chase receipts and drive turnover. “Customers love clearance. There may be nothing higher,” Kingsbury said, in the course of the Q&A portion of the conference call. “We were waiting to take markdowns. We might take fall markdowns in February and March. that was just too late. Timely markdowns are really critical to running the business.”

Turnaround efforts by Kingsbury and Kohl’s recent chief merchandising and digital officer Nick Jones are expected to be felt more so within the back half of this 12 months. Last February, Kingsbury became Kohl’s CEO after serving as interim CEO, and Jones joined the corporate after serving as CEO of the U.K.-based Joules Group.