Kohl's Corp (KSS, Financial) is in hot water, with shares plummeting 17% in the pre-trading today, after a disappointing Q3 earnings report that fell far short of investor expectations. The numbers? Brutal. Earnings-per-share landed at $0.20, missing analyst predictions of $0.31, while revenue nosedived 8.8% year-over-year to $3.51 billion, falling over $200 million below target. The retailer also logged its eleventh consecutive quarter of comparable sales declines, dropping 9.3%. Adding insult to injury, Kohl's slashed its full-year outlook, now projecting a 7-8% drop in net sales and earnings between $1.20 and $1.50 per shareâfar below last year's $2.85. CEO Tom Kingsbury admitted the company is in damage control mode, bracing for a âhighly competitiveâ holiday season.
The timing couldn't be worse for a leadership shake-up. Ashley Buchanan, a retail veteran with experience at Michaels and Walmart, is stepping into the CEO role in January, taking over from Kingsbury after his turnaround plan fell flat. Buchanan faces an uphill battle. Middle-income shoppers, squeezed by rising grocery and housing costs, are flocking to discount giants like TJX and Walmart, leaving Kohl's struggling to stay relevant. While partnerships with Sephora and Babies âR' Us have delivered pockets of growth, they haven't been enough to offset Kohl's sagging apparel and footwear sales. Investors are hoping Buchanan's track record of retail innovation can jumpstart a much-needed revival.
But here's the real kicker: this all goes down right before Black Friday, one of the most crucial shopping periods of the year. Kohl's stock is already down 32% year-to-date, and with these latest results, investor patience is wearing thin. Buchanan has his work cut out for himârevitalizing the core business, capitalizing on growth areas, and regaining customer loyalty in an unforgiving retail landscape. Whether Kohl's can turn things around or continue its downward spiral is the billion-dollar question heading into 2024.
