Kohl’s shares took a significant hit in premarket trading after the company reported a surprising loss per share, falling well below what Wall Street had anticipated. The loss per share of 24 cents was a stark contrast to the expected profit of 4 cents, leaving investors reeling. Additionally, the revenue for the fiscal first quarter came in at $3.18 billion, missing the mark of $3.34 billion forecasted.
The company reported a net loss of $27 million, or 24 cents per share, representing a sharp decline from the year-ago profit of $14 million, or 13 cents per share. Net sales also decreased by 5.3% to $3.18 billion compared to the previous year, with comparable sales down by 4.4%. Furthermore, Kohl’s revised its 2024 guidance, now expecting a decline in full-year net sales ranging between 2% and 4%.
The revised guidance was a significant departure from what Wall Street analysts had predicted, with expectations of a 0.2% gain in 2024 sales. The company also adjusted its full-year diluted earnings per share forecast to a range of $1.25 to $1.85, significantly lower than the previously expected $2.34 per share.
CEO’s Response
In light of the disappointing results, Kohl’s CEO, Tom Kingsbury, acknowledged that there is more work to be done to improve the company’s performance. He stated, “We are approaching our financial outlook for the year more conservatively given the first quarter underperformance and the ongoing uncertainty in the consumer environment.” Despite the challenges, Kingsbury highlighted positive trends in the women’s category and continued growth in the Sephora shop-in-shop partnership.
Kohl’s remains committed to its strategic growth initiatives, including Sephora, home decor, gifting, impulse buys, and the upcoming partnership with Babies ‘R’ Us. The retailer plans to add in-store outposts of Babies ‘R’ Us to approximately 200 locations, aiming to drive sales and attract new customers. Kingsbury expressed confidence in these initiatives, believing that they will have a more significant impact on the company’s performance in the future.
Kohl’s faces challenges following a disappointing first-quarter performance, but the company is determined to overcome these obstacles by focusing on key growth initiatives and addressing areas for improvement. Investors will be keen to see how Kohl’s navigates the current economic environment to drive future success.