Kohl’s, a well-known retail giant, experienced a significant setback in its fiscal first quarter with shares plummeting more than 20% in premarket trading. The company reported a surprising loss per share of 24 cents, far below Wall Street’s expectations of a profit of 4 cents. In addition, revenue for the quarter stood at $3.18 billion, falling short of the anticipated $3.34 billion.
The repercussions of Kohl’s poor performance were evident in the numbers, as the company reported a net loss of $27 million, or 24 cents per share. This marked a stark contrast to the year-ago profit of $14 million, translating to 13 cents per share. Furthermore, net sales declined by 5.3% to $3.18 billion compared to the previous year, with comparable sales down by 4.4%.
In response to the disappointing results, Kohl’s revised its 2024 guidance, projecting a decline in full-year net sales between 2% and 4%. This announcement came as a surprise to Wall Street analysts, who had been anticipating a 0.2% gain in sales for the same period. The company also adjusted its full-year diluted earnings per share outlook to fall within the range of $1.25 to $1.85, a significant decrease from the expected $2.34 per share.
CEO Tom Kingsbury acknowledged the challenges faced by Kohl’s, stating, “We recognize we have more work to do in areas of our business.” He highlighted positive trends in the women’s category and the continued growth of the retailer’s Sephora shop-in-shop partnership. Kingsbury expressed confidence in the company’s key growth initiatives, such as Sephora, home decor, gifting, impulse, and the upcoming partnership with Babies ‘R’ Us, believing that they will contribute more meaningfully in the future.
Kohl’s dismal fiscal first-quarter performance serves as a cautionary tale for retailers in the current economic landscape. The unexpected losses in revenue, net loss, and sales decline underscore the challenges faced by the company. Despite the setbacks, Kohl’s remains optimistic about its growth initiatives and is committed to navigating the uncertain consumer environment. Investors and analysts will be closely monitoring the company’s progress in the coming quarters to assess its ability to rebound from this setback.