Kohl's shares plunge 11% as Q3 results miss estimates, guidance slashed

Kohl’s Corp (NYSE: KSS) shares tumbled 11% after the retailer reported disappointing third-quarter results and significantly lowered its full-year outlook, citing weak apparel and footwear sales.

The department store chain posted adjusted earnings per share of $0.20 for the quarter ended November 2, falling short of analysts' expectations of $0.31.

Revenue declined 8.8% YoY to $3.51 billion, missing the consensus estimate of $3.65 billion. Comparable sales decreased 9.3% compared to the same period last year.

Kohl's slashed its fiscal year 2024 earnings guidance to a range of $1.20 to $1.50 per share, well below its previous forecast and the Wall Street consensus of $1.86.

The company now expects full-year net sales to decline 7% to 8%, with comparable sales projected to fall 6% to 7%. The company had previously expected comparable sales to decline 3-5%.

CEO Tom Kingsbury acknowledged the disappointing performance, stating, "Our third quarter results did not meet our expectations as sales remained soft in our apparel and footwear businesses."

He added that while growth areas like Sephora and home decor performed well, they were "unable to offset the declines in our core business."

Despite the sales challenges, Kohl's reported a slight improvement in gross margin, which expanded by 20 basis points to 39.1%. The company also reduced inventory levels by 3% YoY.

In a separate announcement, Kohl's revealed that Kingsbury will step down as CEO effective January 15, 2025, to be succeeded by retail veteran Ashley Buchanan.

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