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Kohl’s shares plunged as much as 25 percent on Thursday after the retail giant reported an unexpected first-quarter loss and lowered its full-year earnings forecast.
The department store chain reported a 5.3% drop in net sales and a 4.4% drop in same-store sales for the quarter that ended May 4. The company said lower clearance sales compared to last year dragged down same-store sales by 600 basis points.
“Our first quarter results did not meet expectations and do not reflect the direction of our strategic initiatives,” Kohl’s CEO Tom Kingsbury said in a statement.
Kohl’s shares fell Thursday after the company released a disappointing first-quarter earnings report. (Scott Olson/Getty Images)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Kenneth | Coles Co., Ltd. | 21.06 | -6.21 | -22.79% |
“We remain confident in our strategy and believe that our key growth initiatives, including Sephora, Home Décor, Gifts, Impulse and our upcoming partnership with Babies R Us, will contribute even more meaningfully going forward,” Kingberry added. “That said, we recognize there is still work to be done across our business areas.”
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The company now expects net sales for fiscal 2024 to decline 2% to 4%, down from its previous forecast of a 1% decrease to 1% increase.
Kohl’s reported an unexpected sales decline in the first quarter, sending its shares down more than 25%. (Michael Silk/UCG/Universal Images Group/Getty Images)
The company also now expects full-year earnings per share in the range of $1.25 to $1.85, below its previous forecast of $2.10 to $2.70.
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The company reported a loss of 24 cents a share for the first quarter, while analysts had expected a profit of 4 cents a share, according to LSEG data.
Shoppers shop at a Kohl’s department store on March 12, 2024 in Miami, Florida. (Photo: Joe Raedl/Getty Images/Getty Images)
Kohl’s dismal results came as consumers prioritized buying essentials over discretionary products such as clothing, electronics and household goods, and as rising inflation continues to strain budgets.
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But the company’s performance contrasts with other retailers such as Abercrombie, which reported stronger first-quarter sales as its merchandise was more trendy.
Reuters contributed to this report.
