Retail trouble? Not based on Kohl's earnings

Kohl's on Tuesday reported first-quarter earnings that beat expectations on the top and bottom lines, boosted by its focus on driving foot traffic and more tightly controlling the goods it sells in its stores.

"We are very pleased with our strong start to fiscal 2018 as we continued to focus on our priorities of driving traffic and operational excellence," said Michelle Gass, Kohl's incoming CEO.

Shares of Kohl's were up more than 5% in premarket trading.

Here's how the company did compared with what Wall Street expected:

Earnings: 64 cents per share vs. 50 cents per share forecast by Thomson ReutersRevenue: $4.21 billion vs. $3.95 billion forecast by Thomson ReutersSame-store sales growth: 3.6% vs. 2.7% forecast by Thomson Reuters

The retailer last year began a partnership with Amazon to sell the online retailer's smart home products and accept its returns. Kohl's also announced a partnership with discount grocer Aldi to lease the vacant space left behind by its downsized stores. It plans more such partnerships down the road.

Unlike other department stores, Kohl's has benefited from having its stores located away from malls, where the number of shoppers is declining.

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The retailer reported same-store sales growth of 3.6% for the first quarter, beating expectations of 2.7%.

Meantime, Kohl's efforts to more efficiently order and stock the goods in its stores also continue to pay off. Two years ago, Kohl's launched a five-year plan to improve its inventory management, in aims of minimizing the costs of discounts and unbought goods.

"We exceeded the high end of our margin expectations through continued focus on inventory management," Gass said.

Kohl's for the quarter reported net income of $75 million, or 45 cents a share, higher than the $66 million, or 39 cents a share, it reported a year ago.

Excluding $500 million in debt Kohl's paid down the past quarter, the company earned $107 million, or 64 cents a share, marking a 62% jump over the same quarter a year prior.

Sales rose 3.5% to $4.21 billion over the same quarter a year prior. That was higher than the $3.95 billion, analysts were expecting.

Kohl's raised its earnings forecast for the year, and now expects earnings of $5.05 to $5.50 per share, compared with previous expectations of $4.95 to $5.45 per share. Including the impact of debt payment, to earn between $4.86 and $5.31 per share a year ago.

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