Exchange traded funds that invest in retail stocks rose Thursday after Kohl’s (NYSE: KSS) reported higher quarterly net income and boosted its full-year outlook.
Kohl’s shares added 2% in the wake the department store operator’s quarterly update. Sector ETFs that hold the stock such as Retail HOLDRS (AMEX: RTH) and Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) were fractionally higher Thursday.
“Apparel cost inflation is being viewed as a key risk in this story, but the company has undertaken a number of initiatives on both the sourcing and merchandising side that should help mitigate the impact,” Jefferies analysts said in a note on Kohl’s.
“Kohl’s is in the midst of testing price increases in certain areas to see what elasticity looks like and early results are promising,” they added.
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