Kohl’s shares took a steep nosedive, dropping over 20% in premarket trading after the company reported a surprising loss per share. This unexpected turn of events caught Wall Street off guard, as analysts had anticipated a slight profit. Specifically, the loss per share came in at 24 cents, in stark contrast to the expected 4 cents profit. Additionally, revenue also fell short of expectations, with Kohl’s reporting $3.18 billion, compared to the projected $3.34 billion.
The repercussions of the disappointing earnings report were evident in the company’s financial figures. Kohl’s recorded a net loss of $27 million, translating to a loss of 24 cents per share, a significant drop from the previous year’s profit of $14 million, or 13 cents per share. Net sales also took a hit, decreasing by 5.3% to $3.18 billion, with comparable sales down by 4.4% compared to the previous year.
In response to the underwhelming first-quarter performance, Kohl’s revised its 2024 guidance, reflecting a more cautious outlook. The company now anticipates a decline in full-year net sales ranging between 2% and 4%, a far cry from the 0.2% gain that Wall Street had anticipated. Furthermore, the revised full-year diluted earnings per share are expected to fall within the range of $1.25 to $1.85, significantly lower than the expected $2.34 per share.
CEO Tom Kingsbury acknowledged the need for improvement across various areas of the business in light of the disappointing financial results. Despite the challenges, he highlighted positive developments in the women’s category and continued growth in the Sephora shop-in-shop partnership. Additionally, Kohl’s announced plans to introduce in-store sections of Babies R Us in approximately 200 locations, as part of its strategic growth initiatives. Despite the setback, Kingsbury expressed confidence in the company’s overall strategy and its potential for future growth.
Kohl’s quarterly earnings report serves as a cautionary tale of the unpredictable nature of the retail industry and the importance of adapting to changing consumer trends. The company’s challenges underscore the need for ongoing innovation and strategic investments to remain competitive in a rapidly evolving market landscape.