Kohl's (KSS) is set to report Q4 results before the bell tomorrow (8:30am ET). Cap IQ Consensus estimates Q4 EPS of $1.33 (vs. $1.58 in 4Q15), and revs of $6.21 bln (-3.1%) with comps down 2.1%.  

Kohl's issued a disappointing holiday sales update on January 4 and lowered its 2016 earnings per share guidance as a result of it. Investors are hoping that this blip is the bottom and that the story will resume higher from those issues.

However, declining mall traffic and increased online competition provide concerns about an over-population of mall-based stores.  

A substantial portion of Kohl's merchandise comes from vendors and factories outside the U.S.  and therefore it will be important hear how a border adjustment tax could impact the retailer's sales and earnings prospects.

Shares of KSS have been pummeled since the post election highs on December 8th. The stock has been slammed 30% since and trades at roughly 11x estimated fiscal 2017 earnings. Expectations are low, yet investors are looking for confirmation in the guidance that KSS is pretty much trading a valuation that is reasonable.

Stocks Impacted

• KSS

Traditional department stores

• Macy's (M)
• J.C. Penney (JCP)
• Sears Holdings (SHLD)
• Dillard's (DDS)
• Nordstrom (JWN)

Big Box Merchandisers

• Target (TGT)
• Walmart (WMT)
• Amazon.com (AMZN)

Discount Retailers

• TJX Cos. (TJX)
• Ross Stores (ROST)
• Stein Mart (SMRT)
• Burlington Stores (BURL)

Specialty retailers

• Bed Bath & Beyond (BBBY)
• Williams-Sonoma (WSM)
• DSW, Inc. (DSW)

Related ETFs

• Consumer Discretionary Select Sector SPDR (XLY)
• SPDR S&P Retail ETF (XRT)