Kohl's solid quarter makes shares look compelling

Kohl's (KSS) is managing the downturn in consumer spending with remarkable ease. The mid-price department store chain posted a 21% gain in third-quarter net income last week thanks to strong sales. As is usual to see this earnings season, cost cuts helped boost the bottom line, but the retailer also benefited from its expansion of exclusive brands.

Kohl's has a history of getting that value-versus-style proposition just right -- something that bodes well for the stock as frugal consumers become increasingly careful with their discretionary dollars. Indeed, the company appears to be eating some of its competitors' lunches.