Kohl’s Shares Plunge after Big Holiday-Quarter Losses, Profit Shortfall Warning

Kohl’s Corp shares are under pressure on Wednesday shortly before the cash market opening after the retailer posted a big loss and a sales decline of about 7% in the holiday quarter.

The department store operator’s reported a surprise quarterly loss and forecast full-year profit well below analysts’ estimates on Wednesday, as steep discounts to boost sluggish demand for apparel shredded the retailer’s margins.

Kohl’s shares dropped nearly 7% in premarket trading and triggered a 2% fall in shares of rivals Macy’s Inc and Nordstrom Inc ahead of their results on Thursday.

The Numbers

Here’s how Kohl’s did for the quarter that ended Jan. 28 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Loss per Share:  $2.49 vs. expected earnings of 98 cents a share

Revenue:  $5.78 billion vs. $5.99 billion

Its same-store sales dropped 6.6% in the quarter.

Bearish Outlook

Kohl’s also shared a weak outlook for the year ahead. It said it anticipates net sales to range between a decline of 2% and a decline of 4%, including the impact of the 53^rd week of the year that is worth about 1% year over year. It said it expects diluted earnings per share to range from $2.10 to $2.70, excluding non-recurring charges.

CEO Comments – Inflation to Blame

Tom Kingsbury, the company’s newly named CEO, attributed the retailer’s disappointing results to “the ongoing persistent inflationary environment.” The company’s news release also said its profit margins were hurt by more clearance prices and inflated product costs.

Yet he said the company is taking steps to “better position the business for 2023.”